The standoff between the Republican-controlled House and Senate continued Monday as lawmakers sought a way to follow up last year’s big income-tax cuts with more cuts while also finding new revenue to sustain essential state services.
Lawmakers accomplished almost nothing as Republican leaders reinforced their positions and Gov. Sam Brownback promoted his vision for Kansas at a think tank meeting in Chicago.
Senate President Susan Wagle, R-Wichita, called the six-tenths of a cent sales tax due to expire in July an “unprecedented opportunity” in a letter distributed to Kansas House Republican lawmakers.
Wagle, who is pushing to extend the sales tax and cut income taxes more, suggested that many local governments are planning to increase their local sales tax when the state sales tax drops from 6.3 percent to 5.7 percent.
“If we allow the sales tax to sunset, you will receive no credit for lowering it during the next election as communities quickly replace it in order to spend,” she wrote. “If we keep the full sales tax in order to lower income tax, the credit will rightfully belong to you.”
Pointing to a Fox Business channel program by John Stossel about job growth in states with no income tax, Wagle reasserted her position that lowering the income tax is more important than letting the sales tax expire.
“One may also argue sales tax places an undue burden on the poor, and thus, we should lower those as well – but again, lowering the sales tax doesn’t grow jobs,” she wrote.
Sales tax tends to put more burden on poor people because they spend a larger portion of their income on taxable goods, such as food and clothing.
Wagle’s letter comes amid bitter exchanges between House and Senate Republican leaders over how deeply to cut the state’s budget and how much to reduce taxes.
“To me the statement misses the point,” said Rep. Richard Carlson, a Republican from St. Marys who leads tax discussions for the House GOP. “The point is to lower the overall tax burden on the people of Kansas. And the only way you can do that in the long run is to reduce expenditures. Their (Senate) tax plan does minimal reductions of expenditures.”
The Senate and the governor want to extend the 6.3 percent sales tax and cut income taxes more.
House Republicans have offered a compromise to cut the sales tax to 6 percent — half of the scheduled decrease. That is paired with the House’s deeper budget cuts, including a 4 percent cut to higher education.
House Speaker Ray Merrick vented frustration Monday about the Senate’s lack of response to the compromise proposal and called for the Senate to respond or produce a counter offer.
He said he wants a proposal in writing and has gotten only a text message.
"I don’t think that’s too much to ask," he said. "And, in fact, this is not good governance.
"We don’t need to be here, but we are," he said.
Meanwhile, Brownback, who is pushing for the sales tax extension, traveled to Chicago to tell the Illinois Policy Institute about the tax cuts he approved last year and his vision for the state going forward.
Democratic leaders attacked him for promoting the cuts while lawmakers in Kansas are at loggerheads over how to make them work.
Wichita Democratic Rep. Jim Ward said Brownback needs the extended sales tax to cut income taxes and provide adequate funding for core services, such as education, during an upcoming election year. He said Brownback and his allies in the Senate will likely hold out for the extended sales tax.
"I believe that we’re not leaving this building until they (House lawmakers) capitulate to the Senate," he said.
Monday was the 87th day of the scheduled 90-day legislative session.