Kansas lawmakers spent Monday – the fifth anniversary of Gov. Sam Brownback’s signature tax cuts – fighting over how far to roll them back.
The House was set to debate a plan Monday night that would raise personal income tax rates and add a third tax bracket. Some Democrats appeared poised to oppose the measure, contending it wouldn’t offer new revenue for schools.
At the same time, another milestone is approaching. Lawmakers will move past the 100th day of the session on Wednesday and then will exceed the number of days legislative leaders had budgeted. Operating the Legislature costs more than $40,000 a day.
Together, the anniversary and the looming 100th day show the difficulties opponents of Brownback’s tax policy have had in changing the law, and the success proponents – including Brownback – have had up until now in holding the line.
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It has taken opponents five years – through elections and shifting public opinion – to summon the votes needed to force serious debates about rolling back significant portions of the 2012 law. Only after voters swept a number of moderate and Democratic lawmakers into office last fall did significant changes receive consideration in the Legislature.
At the same time, the law remains in place 100 days into a session where efforts to change it have been front and center.
At a standoff
Lawmakers are attempting to close a projected budget gap of almost $900 million over the next two years. They must also enact a new school finance formula that may include hundreds of millions in new spending by a court-imposed June 30 deadline.
Both Republicans and Democrats have pushed for changes to Brownback’s tax policy. Some were critical of President Trump’s new tax plan earlier this month that seemed to build on the Kansas model.
Estimates show the state has foregone more than $3.6 billion in individual income tax money since the 2012 tax cuts took effect in 2013, according to legislative researchers.
But divisions over how much to raise taxes have riven the legislative process and have led to days of standoff and rising tempers.
The plan the House was expected to debate would set personal income tax rates at 3.1 percent, 5.25 percent and 5.7 percent. The top bracket would apply to married couples with incomes greater than $60,000 or single filers with income of $30,000 or more. It would also repeal an exemption for certain kinds of business income.
Without Democratic votes, the bill may pass but may not have enough support to override an expected veto from Brownback. In caucus, Democrats said they wanted to hold out for a better deal.
“The pressure will go up from here,” said House Minority Leader Jim Ward, D-Wichita.
Rep. Jan Kessinger, R-Overland Park, said it would be ironic if the House voted to roll back the majority of the 2012 tax law on the anniversary of the governor signing the bill.
No single tax plan will be enough to undo its impact, he said.
“It took five years of experience to get to where we are today,” Kessinger said. “You can’t have one tax plan that’s going to make it all better.”
‘It will swing back’
Brownback still champions his signature policy. He vetoed a bill earlier this year that would have swept away much of the 2012 law.
But he has also been willing to negotiate with lawmakers on changes. He endorsed a flat tax proposal that was rejected in the Senate, and lawmakers say he has also indicated he would consider allowing a two-bracket tax plan to become law.
“In each of the five years since the tax cuts, Kansas has enjoyed a record number of new businesses, and individual Kansans have seen their wages increase,” Brownback spokeswoman Melika Willoughby said in a statement.
“While the agriculture and energy economies have struggled due to international headwinds, Governor Brownback is confident that working with the legislature, there is a way to close the budget shortfall in a way that doesn’t unnecessarily harm Kansas businesses and families.”
Conservatives like Sen. Ty Masterson, R-Andover and a key legislative ally of Brownback’s, have opposed large tax increases.
Masterson presented a new budget proposal Monday that he said would avoid the “massive” tax increase other Republicans and Democrats have supported. His budget does not include any new state spending and would securitize the state’s tobacco settlement dollars as a revenue source.
“My big surprise is that even this Legislature doesn’t seem to have the will to repeal the whole thing,” Masterson said of the 2012 tax cuts.
Masterson said that legislatures have different cycles and he had expected the pendulum to swing away from the conservatives eventually.
“It’ll swing back,” Masterson said. “Once all those new big taxes hit people, it’ll swing back the other way.”
Earlier in the session, moderate Republicans and Democrats had joined to roll back a significant portion of the tax cuts. But Brownback vetoed the bill and not enough lawmakers voted to override the veto.
That coalition has been less evident this month. Democrats have tried to block new tax plans in an effort to convince lawmakers to pass a new school finance plan first.
Democrats and moderates are also split over the size of the tax bills. Most plans under serious discussion would generate between $1 billion and $1.2 billion.
Rep. Brett Parker, D-Overland Park, said this week that he supports a full repeal of the 2012 tax cuts. A full repeal would generate about $1.4 billion over two years.
Parker, who unseated a conservative incumbent in the 2016 election, said he had gone to forums and told people he opposed almost everything Brownback has done in the past six years.
“I think I would get cheered if we went back and said we reset to pre-2012,” Parker said of a full repeal of Brownback’s tax cuts.
On Wednesday, lawmakers will be two weeks away from tying the 2015 session for the longest session in state history, at 114 days. It’s a distinction many hope the 2015 session will continue to hold.
Lawmakers have plans, vacations, families and jobs they want to return to. The session also costs money.
Some lawmakers said passing the 100-day mark may have a psychological effect, causing legislators to buckle down and finish.
Under the rosiest of scenarios, the Legislature could potentially wrap its work by this weekend – the Memorial Day weekend.
Sen. Dan Kerschen, R-Garden Plain, said he was ready to go home now. In the mornings, he said, he has 80 percent confidence that lawmakers will finish by the weekend. By night, that has slipped to 30 percent.
“One of these days, we’re going to get something and we’re not going to give up,” Kerschen said. “That’s all there is to it.”