To pay for last year’s income-tax cuts and some new ones, Gov. Sam Brownback wants to eliminate the mortgage interest deduction and break a promise that a sales-tax hike would be temporary. Both ideas flopped last session, so the governor’s proposal is asking a lot of his friends in newly high places in the Legislature – too much to be realistic.
Last January Brownback made a play for the $162 million in revenue lost annually to the mortgage interest deduction, only to see the plan die on arrival in the conservative-controlled House. The Kansas Association of Realtors cites polls saying 63 percent of Kansans oppose eliminating the deduction as part of a bigger plan to cut state income taxes.
Yet the plan showed up again Wednesday in the governor’s two-year budget proposal. His administration will argue the offsetting benefits to homeowners of the state income tax’s “glide path to zero,” but is that a fair trade?
As for Brownback’s renewed wish to extend the statewide 6.3 percent sales-tax rate beyond July 1, when it’s scheduled to drop to 5.7 percent: House Speaker Ray Merrick, R-Stilwell, calls it a “tough sell,” as many lawmakers had campaigned against the increase.
Budget director Steve Anderson will need to find more compelling reasons to keep the higher sales tax than one he tried Wednesday on lawmakers: “Do we not want to tax the drug dealers of the state? This is how we get at that money. They do spend.”
Brownback’s budget will invite other fights as well. And it ignored last week’s court order that the state increase per-pupil base aid for schools to $4,492 from the current $3,838 to comply with the state constitution. Instead, Brownback’s budget would increase the base by just $14 for fiscal 2015, while putting casino revenue toward teachers’ pensions and targeting elementary reading via grants. But then the governor made it clear in his State of the State address that he would rather change the state’s constitution and judicial-selection process than restore the per-pupil funding slashed during the downturn. It will be up to Brownback to explain how flouting the courts and constitution on such an essential state service as public education is “maintaining the state’s core responsibilities,” to use the governor’s words.
Both this year and last, Brownback has deserved credit for offering budgets that cut taxes and allow for healthy reserves while remaining balanced – which is more than can be said for the tax plan that passed last spring and will open a $267 million budget hole for fiscal 2014. But Brownback would balance his 2014-15 budget mostly by raising taxes, a plan unlikely to find favor among the conservative legislators he helped elect.