Politics & Government

House, Senate negotiators working on yet another tax compromise for Kansas

Lawmakers are expected to float yet another tax plan Thursday in an effort to break a stalemate that has ground the Legislature to a virtual halt.

No formal meetings have been held yet, but lawmakers circulated a draft proposal Wednesday containing a mix of elements from previous tax bills that have been rejected.

The new proposal would adopt a previous Senate position holding the sales tax at 6.3 percent for general purchases while cutting it to 4.9 percent on food, which works out to an effective tax rate overall of about 6.1 percent.

That’s below the current 6.3 percent but more than the 5.7 percent the sales tax is set to revert to on July 1, when a recession-driven emergency sales tax increase passed three years ago is set to expire.

The proposal also would cut income tax rates over the next several years while simultaneously reducing the amount taxpayers can claim through itemized or standard deductions.

To sweeten the deal for Republican House members, the compromise would adopt a House position of capping the growth of the state budget at 2 percent a year, with any revenue above that going to reducing state income tax rates until they are down to zero.

Republicans, who dominate the House, have struggled for months to craft a tax plan that can generate enough money to fund vital state services while complying with Gov. Sam Brownback’s call for a “glide path to zero” on income taxes.

But they’ve been wary about continuing the current sales tax rate for fear that 2014 election opponents could accuse them of reneging on a promise to revert the sales tax back to 5.7 percent this year.

Democrats said the proposal that circulated Wednesday would put a greater burden on lower-income earners because they pay a larger share of their income in sales taxes. Also, the standard deduction used primarily by lower-income people to cut their tax bills would be reduced faster and further than the itemized deductions generally claimed by wealthier taxpayers.

Senate and House tax negotiators have been rebuffed in the House twice in the past week but are hoping to find a tax mix that will break an impasse that has prolonged what was projected to be an 80-day session.

Day 96 of the legislative session ended for the House on Wednesday 15 minutes after it began, following a quick series of votes to send a rejected tax bill back to committee for more work.

By a 79-32 vote, the House approved a motion to reconsider House Substitute for Senate Bill 84, the tax plan it rejected Tuesday on a 71-42 vote.

House leaders made it clear the reconsideration was a technical move to preserve the bill as a vehicle for further negotiations, and moments later, the House voted to send it back to a House-Senate conference committee.

After the vote, the House adjourned until 10 a.m. Thursday. With nothing to do but wait for the committee and House, the Senate also adjourned until Thursday after a brief session.

After that, the halls of the Capitol were nearly deserted.

However, some key lawmakers were seen going to private meetings as leaders seek to gather the 63 votes they need in the House to move a tax bill and end the session.