With tax cuts and budget deal, Kansas Legislature finishes session
06/26/2012 9:54 AM
08/08/2014 10:10 AM
TOPEKA – Kansans can expect income tax cuts, a little more education funding and, if the economy doesn’t grow quickly, significant cuts in state services as a result of one of the most politically divisive legislative sessions in recent history.
But lawmakers failed to give a full endorsement to any new political boundaries, leaving the redistricting issue up to the courts after nearly a year of debate, piles of proposed maps and political fights that damaged relationships among Republicans.
Lawmakers slammed the final gavel of a grueling 99-day session late Sunday afternoon, and Gov. Sam Brownback is expected to sign this year’s most significant bill sometime this week.
The income tax cut would drop individual rates and eliminate nonwage taxes for most businesses. It’s a move Brownback and fellow conservative Republicans believe could generate thousands of new jobs and make the state more competitive.
But moderate Republicans and Democrats are skeptical that income tax cuts will spur meaningful growth. They say the unprecedented tax breaks will force more than $2 billion in cuts to state services over the next five years, disproportionately hurting low-income and disabled Kansans, who need help most.
The tax cuts are likely to become a key campaign issue. At least eight conservative Republicans seek to unseat incumbent moderate Republican senators and shift the balance of power in the Senate, giving Brownback-style conservatives control of the Statehouse.
Conservatives criticize the Senate for not debating or voting on negotiated tax-cut alternatives, while trying to stymie most of Brownback’s agenda this year. Moderates say the governor misled them into approving the massive tax-cut bill by saying it would only be a starting point to negotiate a more responsible plan. They say it’s irresponsible for the governor to sign the bill.
The tax rate reductions have already made their mark, although they don’t go into effect until Jan. 1.
House Speaker Mike O’Neal, R-Hutchinson, said the tax bill helped create a historic year in the Legislature.
“The governor said early on… ‘Go bold.’ And we did,” he said. “This tax relief is huge, as it should be.”
But he said it probably will create budget challenges, although he said Brownback’s administration assures him they can handle it.
Brownback and House Republicans pushed for a more modest rate reduction even during the final hours of budget negotiations, promising senators more money for education and other spending wishes if they’d approve a batch of redistricting maps favorable to conservatives and an alternative tax-cut plan that would ease the strain on the state’s budget by phasing rate reductions in over several years.
But the Senate refused the deal, saying even the more modest tax-cut plan could have led to budget deficits.
Meanwhile, Senate leaders and Democrats pressed for the property tax relief they say Kansans want most. But a plan to spend $45 million a year to rein in property taxes got swept out of the budget as the House and Senate clashed over priorities.
“Our property taxes are among the highest in the nation, which puts Kansas homeowners and business at a disadvantage,” said Sen. Carolyn McGinn, R-Sedgwick.
Budget, school money
After days of bitter negotiations and dozens of proposed deals, House and Senate negotiators finally reached accord on a $14.3 billion state budget late Saturday. The House approved the spending plan in an 80-35 vote after a brisk, half-hour debate Sunday. The Senate passed it 22-13.
The budget, which is still subject to Brownback’s line-item veto, spends $40 million more on education. That’s about $60 more in per-pupil funding. That translates to about $4.2 million more for the Wichita school district.
But that increase hinged on approval of two complicated policy changes.
One gets rid of an all-or-nothing approach to state money for school districts with a high number of students at risk of not graduating because of poverty or language issues. Now districts won’t need to reach a specific number to get extra money. Another move could cut funding for districts like Wichita, where not all at-risk students file the proper paperwork to entitle the district to more money. Districts will no longer be able to count kids who haven’t filed the paperwork.
Wichita’s aquifer recharge project will get $1 million in state funds. That’s a tiny fraction of the project’s $250 million-plus cost, which has led to several water rate increases for Wichita and nearby cities that buy water from the city. The recharge project siphons above-average flows off the Little Arkansas River, purifies the water and pumps it into the Equus Beds Aquifer to help give the city enough water to supply the region through at least 2050.
About $5 million will be spent to subsidize low-cost air carriers in the state, mostly at Wichita’s Mid-Continent Airport. And the National Center of Innovation for Biomaterials in Orthopaedic Research at Wichita State University will get about $1 million to continue advancing material technology for things such as hip replacements and other surgical implants.
Overall, the new budget represents a slight decrease in spending, mostly because of less spending on unemployment insurance due to a slight uptick in the economy. State general fund spending, primarily state taxpayer money, grew by about .7 percent while leaving a 7.5 percent ending balance that many think could be tapped if the new tax cut doesn’t generate enough growth.
House Minority Leader Paul Davis, D-Lawrence, said Democrats support many parts of the budget.
“However, the reckless tax plan that Gov. Brownback pushed through the Legislature last week completely changes the state’s financial stability,” he said. “This budget fails to reflect those changes. The moment Gov. Brownback signs his tax plan into law, Kansas will be on a collision course with a massive deficit, making this budget nothing more than an empty promise.”
Rep. Marc Rhoades, R-Newton, a chief budget negotiator, said the Senate’s unwillingness to even debate an alternative tax-cut plan forced them to keep spending down in order to have a 7.5 percent ending balance, something state law requires but the Legislature typically ignores.
“That really restrained us,” Rhoades said. “But I think we have a good budget for the state.”
Redistricting and politics
The once-a-decade duty to draw new political boundaries hung over the legislative session.
But after the Senate and House each approved various maps, they never agreed on one batch. As a result, the filing deadline for candidates was pushed back from June 1 to June 11. And the primary election could also be delayed while courts try to decide where the lines should be drawn or whether the Legislature should be forced to figure it out.
Lengthy debates strained relations between moderate and conservative Republican senators and between the House and Senate.
Conservatives accused moderates of pushing conservative challengers out of districts held by incumbent moderates. And moderates accused conservatives of pushing for districts that set the stage for conservatives to win control of the Senate.
It led Sen. Tim Owens, R-Overland Park, the Senate’s chief redistricting member, to storm angrily out of a caucus meeting where conservatives blasted moderates for gerrymandering conservative challengers out of incumbent moderates’ districts.
And it added to the souring mood in the Statehouse.
“This has been a brutal session because of the war that’s going on in the Republican party right now,” said Senate Minority Leader Anthony Hensley, D-Topeka.
Wichita Republican Sen. Susan Wagle said she senses unrest among voters and that people are angry about big government and big spending.
“It’s one of the worst,” she said of the session. “It was probably the most contentious I’ve ever seen.”