Politics & Government

May 17, 2013

Kansas budget negotiations break down

With a messy political puzzle strewn before them – and state services and tax policy hanging in the balance – lawmakers shook their heads, slammed their gavels and went home for the weekend by lunchtime Friday.

With a messy political puzzle strewn before them – and state services and tax policy hanging in the balance – lawmakers shook their heads, slammed their gavels and went home for the weekend by lunchtime Friday.

It was an anticlimactic end to a week marked by Republican infighting over how to balance tax cuts with spending reductions.

Pressure is mounting, but there’s no clear solution in sight as lawmakers enter the final scheduled days of the veto session.

Before public negotiations started Friday, Sen. Ty Masterson, R-Andover, said he had asked House leaders to offer a spending plan that they thought could pass the House.

Rep. Marc Rhoades, R-Newton, said he would not submit to that kind of pressure.

So the House and Senate budget negotiating teams didn’t even meet.

Meanwhile, freshman conservative Republican lawmakers headed into Gov. Sam Brownback’s office to talk taxes. But afterward, Rep. J.R. Claeys, R-Salina, said everyone essentially stuck to their stances.

Brownback is pushing to extend a recession-era sales tax hike to help pay for income tax cuts – those signed into law last year and future reductions.

Claeys and other newly elected lawmakers didn’t get a chance to vote on last year’s big tax cuts. So extending the sales tax, even with more rate reductions, could look more like a tax increase – or at least not the game-changing tax cuts and spending reductions they had hoped for.

“Right now, he’s essentially asking us to approve a tax increase over the next two years,” Claeys said.

Though income-tax rates would continue to fall over the next five years, Claeys said he’s concerned that current lawmakers can’t really lock future legislatures into those cuts.

Veteran Senate Republican leaders are trying to ease fears and wield influence.

“I think we are breaking through. I think the governor is breaking through,” said Senate President Susan Wagle, R-Wichita. “And I think sometimes it just takes a little time for everyone to get a common understanding.”

But that understanding doesn’t appear to leave a lot of space for compromise.

Wagle said Brownback proposed a 6.3 percent sales tax – the current level – and that anything much under that would get vetoed.

Pressed on that, she suggested 6.2 percent to 6.3 percent sales tax would be needed. Without legislative action, the sales tax is scheduled to drop to 5.7 percent in July.

Brownback spokeswoman Sherriene Jones-Sontag noted that Brownback offered a plan that included 6.3 percent sales tax, but she declined to say whether he had threatened to veto anything short of 6.2 percent.

“The governor expects the Legislature to pass a budget bill and a tax bill, and he’s been pretty clear about that,” she said. “It has to work. The budget that they pass has to work with the tax bill they pass.”

The Senate has already voted to extend the current sales tax; leaders say they want to do that so they can more quickly reduce income tax rates.

The House has hesitated to extend the sales tax at 6.3 percent.

House Speaker Ray Merrick said the House has offered four plans, including a half-way compromise that would make the sales tax 6 percent.

“I’d say 99, 99.5 percent of the things they wanted was in the plan we gave them,” he said. “And it was unacceptable. So that’s where we are.”

Two days later, the Senate hasn’t responded.

Vastly outnumbered Democrats are fuming.

“Under the eight governors I’ve served with, I have never seen a governor impose such a shallow scope, threaten to veto a budget from his own party, or walk away from negotiations,” Senate Minority Leader Anthony Hensley said in a statement after hearing Brownback had said he’d veto a budget that doesn’t include the extended sales tax. “This is unprecedented, and shows a real lack of leadership.”

Merrick said he doesn’t want to walk away without a tax plan.

“That’s not the direction we want to go,” he said.

Without a plan, “somebody is going to have to do a lot of budget cutting next year,” he said.

Lawmakers also have yet to resolve how they’ll balance the budget.

The biggest sticking point is how much to cut higher education funding. The Senate initially approved a 2 percent cut. The House backed a 4 percent cut.

Brownback has advocated flat funding. University officials warn any cuts could kill their momentum and cause tuition increases.

The Senate is now asking for a 1 percent cut. But the House hasn’t agreed.

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