Politics & Government

Senate panel rejects Brownback tax plan, advances Democrats’ proposal

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Tax increases backed by Democrats in the Kansas Senate made it through a committee Tuesday afternoon, while a tax plan from Gov. Sam Brownback failed to clear that same hurdle.

Senate Majority Leader Jim Denning, R-Overland Park, said he planned for the Senate to debate the Democrats’ bill on Thursday.

The Democrats’ tax plan would raise more money for the state by bringing back a third tax bracket of 6.45 percent for single filers making more than $35,000 and married joint filers making more than $70,000.

It also would end the tax exemption for roughly 330,000 business owners known as the LLC loophole but would leave other income tax rates and brackets frozen in place.

Denning said he thinks there’s Republican support for the Democratic-backed bill: “That’s why we’re going to get it to the floor. Especially the freshmen, they’re really keen on that third bracket.”

State estimates show the plan would bring in more than $1.2 billion over the next two fiscal years.

“Some people will call this a tax increase,” said Senate Minority Leader Anthony Hensley, D-Topeka. “I would say, in my opinion, this is a restoration of our tax structure pre-Sam Brownback’s 2012 tax bill.”

The bill was passed out of the committee without a recommendation.

Denning said that signified lawmakers didn’t want to take a stand on the bill in the committee but that they want to get the bill to the floor.

The tax plan backed by the governor failed to garner even that support from the committee.

Brownback’s plan, which he proposed to lawmakers last month, would increase taxes on alcohol, cigarettes and tobacco products.

It avoids raising income tax rates or ending the business tax exemption and instead opts to sell off tobacco settlement funds to make it through projected budget shortfalls.

That tax plan was soundly defeated in the GOP-controlled committee.

The governor has maintained his support for his 2012 tax cuts that trimmed income tax rates, threw out the third tax bracket and created the tax cut for certain businesses.

“I don’t know what to make of it,” Sen. Caryn Tyson, R-Parker and chairwoman of the tax committee, said about the governor’s tax plan failing to pass. “It was somewhat of a surprise that it couldn’t even get out without recommendation.”

Denning said the lack of support caught him off guard.

“I thought we would pass it out for debate on the floor, too,” Denning said.

If the plan holds, the Democratic bill would head to the Senate floor on Thursday, roughly a week after a tax plan backed by Senate Republican leaders fell apart before it could come to a vote.

An amended version of the Republican leadership’s tax plan was also passed out of the committee without a recommendation on Tuesday afternoon.

State estimates show the Republican leaders’ plan would bring in around $620 million over two years.

The state faces a budget shortfall of around $750 million over the next two fiscal years.

A budget gap of roughly $320 million this year would not be remedied by either the Republican or Democratic tax plans.

Tyson said there may be enough votes to narrowly pass the Democratic-backed legislation.

“It won’t be with my vote,” Tyson said. “But they may have 21 votes.”

Hunter Woodall: 785-354-1388, @HunterMw