A deal that would further reduce income taxes in Kansas is unlikely before May, after lawmakers have fresh state revenue estimates, negotiators for the Kansas House and Senate said Wednesday.
Lawmakers begin a monthlong break after this week and will return on May 8. Negotiators have been trying to work out a compromise on tax-cutting legislation after the two chambers passed different versions.
“I think this is the cutoff date for agreement on the tax plan this week,” Senate Assessment and Taxation Chairman Les Donovan said Wednesday. “I wish we had moved closer.”
The sticking point is what to do about a 2010 sales tax increase that is set to expire July 1.
Republican Gov. Sam Brownback wants to follow up on massive individual income tax cuts enacted last year by reducing rates further over the next four years. But the state must stabilize its budget, and Brownback is proposing to keep the sales tax at 6.3 percent, rather than letting it drop to 5.7 percent in July, as provided by law.
The Senate also wants to keep the higher rate, to help make up revenue that would be lost to further cuts in income taxes. The House wants to let the sales tax drop as scheduled and approved a bill with less aggressive income tax cuts.
House Taxation Committee Chairman Richard Carlson reiterated the House position Wednesday in making an offer to Donovan.
“There’s no way I can sell this to my people,” Donovan replied.
Brownback said he wasn’t surprised at the development. He said lawmakers sometimes need time to think things over before reaching a deal. He also said legislators are waiting for more revenue information, including the new state estimate scheduled to be released on April 19. That report will offer a clearer picture of how much revenue Kansas can expect to collect for fiscal 2014, which begins July 1.
“Everybody wanted to get the session done early, but that’s hard to do,” Brownback said.
Legislators were surprised when the Kansas Department of Revenue reported that March tax collections fell nearly $57 million short of expectations, almost wiping out a surplus the state had enjoyed since July 1.
Revenue officials blamed the decline in collections on delays in federal tax deadlines forced by congressional action on fiscal issues. Kansas collected almost $364 million in March, when it had expected to take in more than $420 million.