On the eve of a pivotal vote, Gov. Sam Brownback on Tuesday urged Senate Republicans to approve the tax cuts and extended sales tax increase he has proposed to bolster the state economy.
“This is a big deal,” he said. “It’s needed. It puts us in a very solid position for us moving forward in the future, getting income tax rates down and funding our core competencies and our core needs.”
Speaking to 25 members of the 32-member Senate GOP caucus, Brownback acknowledged the political baggage tied to the tax cuts – extending a sales tax increase many Republicans opposed, doing away with the popular mortgage interest deduction, and preventing big cuts to core government services that could be forced by deep tax cuts approved last year.
“These all have histories and legacies,” he said. “A lot of emotions go into that.”
Brownback, however, urged them to set aside the political history, look at the big picture and tackle the tough issues to move the state forward.
Republicans are divided over tax policy.
A Senate panel approved Brownback’s proposal but only after jettisoning a portion of the bill to eliminate the real estate tax deduction that benefits about 372,000 taxpayers with an average deduction of $125. Meanwhile, a House panel has approved an alternative plan that lets the sales tax drop and channels future state revenue growth toward income tax rate cuts.
Senate Majority Leader Terry Bruce banned reporters from staying in the room of a downtown Topeka office building after Brownback completed his speech to Senate Republicans. Bruce said Republicans needed to discuss the state’s budget and their strategy in debating and voting on Brownback’s plan Wednesday.
Bruce said it was the Senate GOP’s first closed caucus meeting and that senators needed to talk strategy and budget in private. The Senate’s rules allow them to close their meetings.
Members of the media formally objected to the closing of the meeting.
When reporters left, top Brownback administration officials – including Revenue Secretary Nick Jordan and Budget Director Steve Anderson – remained to answer questions and talk about taxes and budget.
Brownback’s former chief of staff, David Kensinger, who now runs a lobbying firm and is chairman of Brownback’s policy organization, Road Map Solutions, also remained.
House Minority Leader Paul Davis, who was at a nearby Democratic fundraiser, said that Senate Republicans should discuss taxes and budget in the open, especially because they have a majority capable of passing laws without Democrats.
Brownback’s proposal, which is expected to get a first-round vote Wednesday, would keep the temporary sales tax hike, leaving the state’s rate at 6.3 percent.
His proposal would cut the upper tax bracket to 3.5 percent from 4.9 percent in 2017 and drop the lower tax bracket to 1.9 percent from 3 percent from 2014 to 2016.
He also wants to buy down income taxes further with revenue growth exceeding 4 percent. The governor ultimately wants to zero out the income tax for Kansans.
But House Republican leaders say the Republican-dominated House has no appetite for extending the sales tax rate.
The House Taxation Committee on Tuesday approved an alternative that would lower personal income tax rates any time the state’s revenues exceed 2 percent growth year-to-year. It wouldn’t extend the sales tax, but it would pipe $370 million in transportation funding into the state’s general coffers over the next two years to help prevent deep service cuts.
Republicans and Democrats voiced dissent though – Republicans because it doesn’t cut taxes fast enough, and Democrats because it could cut government services and they say the state’s property taxes should be cut first.
“That’s not a glide path to zero,” Rep. Nile Dillmore, D-Wichita, said, borrowing a phrase Brownback has used to describe his push to eliminate income taxes.
Rep. Arlen Siegfreid, R-Olathe, finished the sentence for him: “It’s a trans-Atlantic flight.”