Senate budget requires $350 million in new taxes

TOPEKA — The Senate slogged into the budget melee Wednesday and, after about four hours of debate, passed a budget that will need about $350 million in new taxes.

Senators are slated today to debate a tax package that includes raising the state sales tax from 5.3 percent to 6.3 percent for three years and eliminating a tax deduction for certain industries worth about $17 million. Legislators are struggling to fill an estimated $500 million budget gap.

At one point, Sen. Pat Apple, R-Louisburg, asked if it would be irresponsible to vote for the budget bill and later vote against the needed tax increases.

Sen. Jay Emler, R-Lindsborg, who leads the Senate budget committee, said, "If you vote for a budget that is not balanced, then you must vote for the package that balances the budget, and that would be the tax increase."

The $13.6 billion budget restores some funds for corrections and social services that were cut last year. It also would use state funds to make up for federal stimulus dollars that school districts will lose next year.

Moderate Republicans and Democrats supported the budget, saying deeper spending reductions would cripple vital state services. But conservatives opposed it, saying more cuts were preferable to a tax increase.

"It's not our money that we're over-committing. It's their (taxpayers') money and it's time to stop," said Sen. Karin Brownlee, R-Olathe.

The measure cleared the chamber 23-17. It now goes to the House, which plans to debate its own alternate budget proposal this morning after rejecting a budget that included cuts but no new taxes on Tuesday. Most likely the two chambers will form a compromise in a negotiating committee.

"This is obviously a huge step forward. The question now is what will the House do with its budget, what will happen in conference committee," Emler said.

The Senate proposal eliminates from the governor's initial proposal about $8.5 million to bring state employee pay up to market rates and $55.3 million to boost per-pupil state aid by $50. It also cuts salaries for top state officials by 5 percent.

The budget also relies on money the state hopes to receive in fiscal 2011, which starts July 1. That includes $131 million from federal Medicaid matching funds, which have not been approved, and $27 million from a pilot program to recover Medicaid costs.

It also expects $25 million from a casino in Sumner County. That's the amount of the application fee for a casino; the state is seeking applicants now. If no applicant is successful, the state would not be able to keep the $25 million fee.

"I find it interesting that we have become a body, a people, of faith," joked Sen. Dick Kelsey, R-Goddard.

Senators are relying on faith that a casino would be built in Sumner County, that Congress would approve additional money for Medicaid and that the pilot program would find enough fraud to collect the anticipated amount.

Earlier in the debate, the Senate rejected 12-28 a proposal by Sen. Ty Masterson, R-Andover, to trim the budget instead of raising taxes.

He suggested selling off surplus state property, selling some property and renting it back, reducing state employee pay by 5 percent by closing government at 3 p.m. on Fridays and cutting $66 million from schools. That would reduce the base amount schools receive per pupil to $3,962 instead of $4,012 in fiscal 2011.

Masterson urged lawmakers who are against raising taxes to support his amendment.

The chamber later added a provision that would create a committee to survey what property the state owns so that it possibly could sell some.

Few of the changes made on the Senate floor affected the proposal's bottom line.

Like the House, the Senate added a provision that would block Planned Parenthood of Kansas and Mid-Missouri from receiving part of $2.7 million the state receives from the federal government to support family planning and contraceptive services.

Under the plan, state and county public health offices, hospitals and safety net clinics would receive priority over Planned Parenthood. The money cannot be used to provide abortion services.