Sales tax stalemate highlights legislative disagreements even within one party

05/28/2013 6:53 PM

08/08/2014 10:17 AM

It was supposed to be so easy.

A conservative House. A conservative Senate. A conservative governor.

The Republican-controlled bodies were expected to remake Kansas into a Red State model with low taxes, a friendly business climate and a streamlined, efficient government.

But that vision for Kansas has been slow to coalesce during this year’s legislative session as the majority party struggles to settle on the best route for cutting taxes.

Lawmakers went home Friday after 91 days without cutting taxes or passing a budget, two of the session’s principal goals. They are set to reconvene this week after the holiday weekend at an estimated cost of $45,000 a day.

Many lawmakers left Topeka frustrated and angry Friday after the House decisively rejected a plan offered by the Senate to cut income taxes and sales taxes on food while keeping the sales tax on other items at 6.3 percent, instead of allowing it to drop to 5.7 percent in July as scheduled.

“I am dumbfounded,” said state Sen. Jim Denning, an Overland Park Republican. “I don’t know what we’re doing or where we’re going from here.”

A panel of House and Senate negotiators agreed on a plan late Friday that might provide a path to ending the session as early as next week. But passage of their compromise is far from certain.

The long slog this session surprised many lawmakers, especially with the House, the Senate and the governor seemingly in philosophical alignment.

“I did not think it would be this difficult,” said Rep. Arlen Siegfreid, an Olathe Republican and former House majority leader. “I thought we would have a fairly easy time coming to some sort of agreement.”

The Republican rift in the Legislature is tangled around a controversial sales tax increase approved in 2010 to help the state bridge economic recession.

That tax is set to lapse July 1, leaving the state with a 5.7 percent sales tax. However, Republican Gov. Sam Brownback wants to keep the sales tax at 6.3 percent to fill deep holes left in the budget because of income tax cuts enacted last year and to cut income taxes deeper in coming years.

The Republican Senate, controlled by the party’s conservatives, wants to keep the sales tax at 6.3 percent. The House has insisted on 6 percent because many of its members either voted against the tax or got elected to the Statehouse by running against it. House members would like to see the budget cut even more.

The two chambers have traded tax plans eight times since May 15, with each side accusing the other of an unwillingness to compromise.

However, the House on Friday persuaded Senate negotiators to agree on a tax plan that would keep the sales tax at 6 percent and gradually cut income taxes from 2014 to 2018.

House tax chairman Richard Carlson said he thought that plan could pass his chamber.

But Senate Majority Leader Terry Bruce didn’t give it such strong odds. That leaves open the possibility that the stalemate could continue well after the Memorial Day holiday.

Interviews with lawmakers reveal that the breakdown at the Legislature goes deeper than just the sales tax:

Republicans — even the conservatives — aren’t a monolith. Their views differ widely on taxes.

Some want to cut income taxes quickly. Others want to reduce income taxes more slowly. Some want to reduce spending more gradually than others. “We are a large majority, but we have a large degree of differing opinions on everything,” said Rep. Travis Couture-Lovelady, a freshman Republican from Palco.

Many of the freshman House Republicans — there are 49 in all — are still grappling with the complexities of tax policy. Although the freshman class gets high marks from senior lawmakers, the newbies still have some learning to do, some lawmakers said.

“Most of them spent half the session trying to find where the bathrooms are and we are asking them to change tax policy for a generation. That’s an intimidating task,” Bruce said.

Carlson, the House tax chairman, said the freshmen may still be learning about tax policy, but he didn’t think they were overwhelmed.

“It may be a learning experience but they are certainly learned people in their own right,” Carlson said.

Changing tax policy that moves the state from an income tax to consumption tax is an enormous task.

“We’re trying to change the trajectory of the state,” said Senate President Susan Wagle, R-Wichita. “It is very hard to get agreement on a bill that changes tax policy for the next decade.”

Then there’s the role of the governor, who Democrats particularly accuse of not being willing to accept anything less than keeping the state sales tax at 6.3 percent.

“He’s asking all these people to clean up his mess,” said House Minority Leader Paul Davis, a Lawrence Democrat.

“And lot of conservative Republicans are saying, ‘Why should I vote for a huge tax increase and not cut some of the spending I want to see cut to bail out a mess I had no role in creating,’” Davis said.

Brownback spokeswoman Sherriene Jones-Sontag said the governor will consider any plan that lowers taxes and fosters an environment for creating jobs while protecting core services.

Next year’s House elections, and the role of conservative groups like the Kansas Chamber of Commerce, could be a factor stalling compromise, said Chapman Rackaway, a political science professor at Fort Hays State University.

The chamber has opposed renewing the sales tax increase and was a key player in electing conservatives to the Senate last year.

As a result, House members may be angst-ridden about facing primary opposition from challengers on the political right, he said.

“These House members are worried about next year,” Rackaway said. “Anything related to taxes there is a great paranoia about.”

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