Kansas Senate president says she’ll propose across-the-board spending cut

Senate President Susan Wagle plans to propose an across-the-board spending cut – including for schools – during a budget debate Thursday.

Meanwhile, Gov. Sam Brownback has been discussing a flat tax proposal with lawmakers, in addition to other plans, his office said Wednesday.

Lawmakers are seeking to develop new tax legislation after the governor prevailed in a fight last month over a bill that would have raised personal income taxes and eliminated an exemption for businesses.

First, the Legislature appears set to take action to balance the current-year budget. Wagle’s amendment is expected to come during a debate on a bill to fix the state’s 2017 budget shortfall, which stands at about $280 million. Wagle said the cut she will propose would fill only a portion of the budget gap.

The Wichita Republican said the size of the cut would be under 5 percent but had not been determined yet. She is talking to other senators about that.

The spending cut, which she indicated would carry forward into the next budget, would lessen the amount Kansas needs to raise taxes, she said.

“We’re experiencing a shortfall in all agencies, and after we’ve had a budget committee look at all aspects of spending and dictate the amounts they think are appropriate for each agency, how do you do anything other than across the board and have everyone experience the pain the same amount?” Wagle said.

“And it is painful, but I’ve experienced it in my family, I’ve experienced it in my business, and I think Kansans expect us to cut expenses before we determine a tax increase.”

Last month, Wagle voted against legislation that would have raised personal income taxes and eliminated an exemption on pass-through business income, although she urged Brownback to allow the bill to become law.

Brownback vetoed the bill, and Wagle voted against overriding the veto. The override effort fell three votes short in the Senate.

Earlier in the session, Senate GOP leaders put forward a plan that would have cut K-12 spending by 5 percent and higher education spending by 4 percent. Legislative leaders called off a debate on that bill after acknowledging the cuts didn’t have enough support to pass.

The 5 percent cut was “knocked down tremendously,” said Mark Desetti, legislative director for the Kansas National Education Association.

“I don’t believe there is support in either chamber for additional cuts to K-12 or higher education, or for that matter social services or anybody else,” Desetti said.

School funding

The proposed cut from Wagle, which would include K-12 and higher education, comes after the Kansas Supreme Court ruled that funding for public K-12 schools is inadequate. Justices set a June 30 deadline for the Legislature to enact a new funding system, but didn’t specify how much lawmakers must spend on education. She said the amount cut could be restored through a new school finance formula.

Both Republican and Democratic senators said they doubted the amendment would have enough votes to be adopted. Senate Minority Anthony Hensley, D-Topeka, said he doesn’t think the Senate will support an across-the-board cut, especially in light of the Supreme Court decision. Estimates on how much additional spending on schools may be needed to bring funding into compliance with the court order have ranged from under $400 million to more than $800 million.

“If you have a cut to K-12 education, that only just compounds the problem in terms of adequacy,” Hensley said.

‘Political theater’

Sen. Carolyn McGinn, R-Sedgwick, chairwoman of the Senate’s budget committee, said she doesn’t think the Senate will support an across-the-board cut. Her committee, the Ways and Means Committee, unanimously advanced a bill to balance the current-year budget to the Senate floor on Tuesday. That bill does not include cuts to state agencies or education.

Under that bill, Kansas would effectively loan itself about $103 million from a long-term investment fund to help balance the fiscal year 2017 budget. The state would pay back the fund in future years.

The bill would also withhold $150 million from the state’s pension system, KPERS, this year. The amount would be paid back over the next two decades.

Sen. Ty Masterson, R-Andover, said Tuesday he would vote for cuts and would support a 2 percent reduction to non-classroom education spending. On Wednesday, he appeared skeptical of Wagle’s plan to cut across the board, saying senators are spending time on 2017 while the session is about crafting a budget for 2018 and 2019. He called the cut proposal “political theater.”

Although Thursday’s debate is expected to focus on the current-year shortfall, discussions are continuing about future years. After the Senate chose not to override Brownback’s tax veto, lawmakers are looking for the chamber to take the first bite at a new tax plan.

Tax code

The governor’s office said Brownback has discussed a number of plans, including a flat tax, over the past several months. Under a flat tax, taxpayers are taxed at the same rate, regardless of their income.

“He is certainly open to considering legislation that makes the Kansas tax code fairer, flatter and simpler, while also keeping the tax burden as low as possible for Kansas families and businesses,” Brownback spokeswoman Melika Willoughby said.

Masterson, a legislative ally of Brownback, said he has looked at some flat tax numbers. He said he’d like to see a flat tax of 4 percent or less.

“That is a version of a tax plan that I would consider,” Masterson said. “You hear a lot about closing that small business exemption. I would consider it if we go to a flat tax because I believe a flat, fair tax is a conservative position.”

That single tax rate could include standard deductions and low income exclusions, Masterson said.

Contributing: Hunter Woodall of the Kansas City Star

This story was originally published March 15, 2017 at 10:01 AM with the headline "Kansas Senate president says she’ll propose across-the-board spending cut."