Politics & Government

Kansas Senate rejects latest tax proposal

Senate President Susan Wagle, R-Wichita, confers with budget chairman Sen. Ty Masterson, left, R-Andover, and Senate Vice President Jeff King, R-Independence, during a tax debate Monday evening.
Senate President Susan Wagle, R-Wichita, confers with budget chairman Sen. Ty Masterson, left, R-Andover, and Senate Vice President Jeff King, R-Independence, during a tax debate Monday evening. The Wichita Eagle

TOPEKA – Kansas senators voted down a plan to fill the state’s $400 million budget hole for the second night in a row Monday.

Republicans, who hold 32 of the 40 seats in the Senate, have struggled to find consensus on tax policy during a legislative session that will enter its 103rd day Tuesday.

“I think a lot of them aren’t yet in a situation where they want to compromise. … They weren’t ready yet today,” said Senate President Susan Wagle, R-Wichita. “I hope they are tomorrow.”

Meanwhile, a House leader said his chamber won’t act on a tax plan until it sees what the Senate passes.

State workers will face furloughs starting Sunday unless lawmakers find a budget fix or approve an interim budget, the state’s budget director has said.

As it stands, HB 2109, the bill meant to fix the budget, would actually increase the deficit, because senators have approved amendments for tax decreases but not for increases.

The proposal offered Monday by Sen. Les Donovan, R-Wichita, was similar to one presented by Gov. Sam Brownback on Saturday. It would have frozen income tax rates and raised the sales tax rate to 6.5 percent from 6.15 percent.

The rate on food would have dropped to 6 percent in January, but a food sales tax rebate that benefits low-income Kansans would have ended.

Donovan’s amendment also proposed eliminating income taxes for low-wage workers beginning in 2017.

Senate Minority Leader Anthony Hensley, D-Topeka, used a procedural motion to divide the amendment into parts. He had used the same move the night before to insert a sales tax cut into the bill.

Donovan warned fellow Republicans not to support the income tax cut without supporting the other parts of the bill. But the income tax cut passed easily 33-4.

“I think we just walked into an open door, and if you hear a click behind you, we’re locked in,” he said.

The sales tax increase proved less popular.

Wagle, a cancer survivor, compared the tax increase to her chemotherapy, warning that it would hurt but was necessary for the health of the state.

“Why don’t we just swallow our medicine tonight? It’s day 102,” she said.

She told Republicans it was time to govern. “We’re close. But we’re not going to reach the end if we reject this again,” she said.

Senators voted down the sales tax increase 30-8.

No sales tax hike

Sen. Jeff Melcher, R-Leawood, said he did not knock on doors telling people he would go to Topeka to raise their taxes, adding lawmakers should close tax exemptions instead of raising rates.

“I don’t think this is a medicinal cocktail. I think this is an overdose,” he said, using Wagle’s analogy.

Hensley accused Wagle of hypocrisy, noting that she opposed a sales tax increase in 2010 when the state faced a shortfall under Democratic Gov. Mark Parkinson.

Donovan’s plan also included a 50-cent tax increase on a pack of cigarettes and a 20-cent tax on e-cigarettes. And it would have eliminated income tax deductions except for charitable contributions, mortgage interest and property tax. The latter two would have been reduced by 50 percent.

Those measures were rejected by a near-unanimous voice vote.

Senate Majority Leader Terry Bruce, R-Hutchinson, defended the decision of GOP lawmakers to vote “no” on the sales tax increase.

“They’re just reluctant to basically waste the vote,” he said, contending that there’s little incentive to vote for a tax package unless there’s a high certainty it will pass.

Sen. Michael O’Donnell, R-Wichita, said he voted “no” because his constituents are urging him to vote against a sales tax increase. He also has opposed proposals to put business owners back on income tax rolls.

Some GOP lawmakers say additional budget cuts need to be considered before they can support tax increases.

Sen. Rob Olson, R-Olathe, challenged those lawmakers to offer a specific proposal to cut the budget instead of just rejecting plans.

“Where’s the $400 million in cuts?” he said. “If you guys have got the cuts, come forward.”

House waiting

The House does not plan to act on taxes until it sees what passes in the Senate, House Majority Leader Jene Vickrey, R-Louisburg, said earlier Monday.

“That’s the next step, is seeing if the Senate will pass the plan and what that is and see if that’s something where maybe we can find support in the House,” he said.

Rep. Don Hineman, R-Dighton, called waiting on the Senate frustrating but added, “we need to know what will be acceptable to the Senate.” He contended that the Senate has been the more volatile chamber on the issue.

Other House members criticized this approach.

“I cannot convey my level of disappointment in English,” said Rep. Stephanie Clayton, R-Overland Park.

“The fact that we are being held hostage to a group that last night demonstrated they are not organized and not willing to govern in a professional manner is a travesty,” she said.

The House did have an opportunity to vote on tax policy Friday but wasted it, said Rep. John Carmichael, D-Wichita. The House advanced without debate a tax bill that raises just $30 million in an effort to speed up negotiations with the Senate.

“When we voted on Friday to not debate a tax bill on the floor of the House of Representatives, we essentially turned over those determinations to the Senate,” said Carmichael, one of the only lawmakers in the 125-member House to oppose a measure to cut off debate.

“I hear from my constituents every day that they want me to do something to restore fairness to taxes in Kansas, and it is very disappointing that it appears I may have no input whatsoever in the process,” he said.

House survey

The leading ideas in the House include increasing the state sales tax and rolling back the zero tax rate for certain types of businesses, according to a survey of Kansas House Republicans released Monday.

It would take 63 votes to pass a tax plan in the House.

Forty-three House members said they’d vote for raising the sales tax from 6.15 percent to 6.5 percent. Support fell off for higher tax rates: 25 votes for 6.55 percent, 19 votes for 6.6 percent and 20 for 6.65 percent.

Results were murkier when it came to possibly restoring taxes on owners of limited liability corporations and Subchapter S companies, a centerpiece of the governor’s 2012 tax cuts.

Thirty-five representatives supported setting a tax on those business owners’ income at 2.7 percent, the same rate paid by the poorest Kansans. Another seven said they’d go for 1 percent. Nine said “absolutely no.”

The governor has threatened to veto a rollback of the business exemption except for a small change in tax-guaranteed payments to partners in an LLC.

Reach Bryan Lowry at 785-296-3006 or blowry@wichitaeagle.com. Follow him on Twitter: @BryanLowry3.

How they voted

Here’s how south-central Kansas senators voted on the proposal to increase the sales tax. It failed 30-8.

Republicans voting yes: Les Donovan and Susan Wagle, Wichita; Dan Kerschen, Garden Plain

Democrats voting no: Oletha Faust-Goudeau, Wichita

Republicans voting no: Michael O’Donnell and Mike Petersen, Wichita; Steve Abrams, Arkansas City; Terry Bruce, Hutchinson; Forrest Knox, Altoona; Ty Masterson, Andover; Carolyn McGinn, Sedgwick

Absent: Richard Wilborn, R-McPherson

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