Lawmakers more open to tax hikes | The Wichita Eagle

TOPEKA — In January, sales tax increases, eliminating sales tax exemptions and increasing sin taxes found only tepid support among lawmakers.

That's changing.

The transformation is partially due to 2011 fiscal year's growing puddle of red ink — $400 million-plus and likely to expand.

"We are being forced by economic conditions to consider all of these options that weren't even being talked about at the beginning of the session," said Rep. Melody McCray-Miller, D-Wichita, who serves on the House Taxation Committee.

Sen. Jay Emler, chair of the Senate Ways and Means Committee, anticipates the panel will vote out a budget proposal on Friday that includes about $100 million in budget cuts. That leaves a significant gap that would be filled by increased revenue to the state coffers.

"This problem is really pretty deep," said Emler, R-Lindsborg. "If we were to make $400 million in cuts, we are talking about some really horrific cuts."

While lawmakers don't like the idea of increasing taxes, they are coming to an understanding that state programs can't be cut enough to make up the entire shortfall, Emler said.

Late next week the Senate Assessment and Taxation Committee will debate a bundle of tax increases — from a three-year, 1-cent sales tax increase to so-called sin taxes: higher levies on cigars, cigarettes, soft drinks and alcoholic beverages.

Not everyone agrees that increasing revenue is the solution. Last Friday, after Gov. Mark Parkinson, a Democrat, called on lawmakers to eliminate sales tax exemptions, House Speaker Rep. Mike O'Neal, R-Hutchinson, countered there was still fat that could be trimmed from the state budget.

Tax increases and eliminating sales tax exemptions would harm Kansas in the long run, he said.

"Instead of an appetite for taxes I think there is a reticence for further cuts; that doesn't mean that further cuts aren't possible," said Rep. Kasha Kelley, R-Arkansas City, who sits on the House Appropriations Committee.

In some ways increasing taxes is an easier answer than telling programs no and cutting more, she said.

Kelley worried that lawmakers were focused on the immediate small picture instead of the bigger picture that included the long-range impact of increasing taxes.

If the state were to raise the sales tax by 1 percent, it would cost a family earning $50,000 a year another $155.47.

The idea of increasing taxes is also receiving different receptions in the two chambers.

Sen. Les Donovan, R-Wichita, chairman of the Senate tax committee, said he expects his committee to consider a package increasing various sin taxes next week. He said he thought there would be some increases.

"I am absolutely normally not for tax increases, because the only time I would consider a tax increase is when it was absolutely necessary, and I'm afraid it is this year," he said.

In the House Taxation Committee on Thursday, the panel tabled a bill that would double the levy charged per gallon on liquor, beer and wine. But the idea is likely to resurface. The committee also turned down a measure that would have increased the state sales tax.

The committee moved out a bill last week that would eliminate a sales tax exemption on residential utilities but did so without recommendation, indicating little support for a proposal.

That the measures are even being discussed in committee is some indication of growing support for increasing taxes in some way. In years past, bills like the alcohol tax increase "wouldn't have even seen the light of day," McCray-Miller said.

"We listen to the people and what I'm hearing from my constituency is, 'It's OK, please go ahead and consider that 1-cent sales tax increase,' " she said.

One challenge of raising sin taxes is that lawmakers would have to pass several of them to fill in the budget gap, she said.

McCray-Miller anticipated that any tax increase would face a tough challenge on the House floor.

Donovan said he hoped his committee could strike a balance between the needs of people receiving service from the state and those who pay taxes.

While cuts to state budget need to be part of the solution, they can't be all of it, he said.

"If I thought we could cut another $300 to $400 (million) out of the budget that is where I would be, because that is the way I would prefer to do it," he said.

While that is how private business operates, government can't operate that way, he said.

"You build programs and you get people and groups of people accustomed to getting a certain amount of money each year, you take that away from them and you totally uproot their lives," he said.