Kansas House rejects tax plan to increase sales tax, close deductions

TOPEKA – House Speaker Ray Merrick told Republican House members that a tax bill passed by the Senate was the last train out of Topeka Wednesday night, but by Thursday morning that train had derailed.

The House overwhelmingly rejected HB 2109, a bill that coupled tax increases with a slew of policies, was overwhelmingly defeated by a final vote of 94-21.

Lawmakers began debate on the tax plan around 9 p.m. Wednesday, but when the high-stakes bill – meant to plug the state’s $400 million budget hole – initially failed to gain the votes needed for passage, House leaders requested a call of the House, a procedure that requires guards to close the doors of the chamber and search for missing representatives.

Lawmakers are only allowed to exit the chamber to go to the bathroom if they request permission.

Legislative leaders tried to press lawmakers to change their votes in favor of the bill, but as the clock neared midnight the bill began to shed votes and leaders decided to break until 8 a.m. Thursday.

When the House resumed in the morning, legislators were no more successful in building consensus for the bill and achieving the 63 votes needed for passage. House leaders gave up around 10:30 a.m. and the bill was officially voted down.

The 2015 legislative session has lasted a record 112 days.

The Brownback administration has said that if lawmakers fail to pass a tax then it will proceed with a 6.2 percent across-the-budget cut, which will mean a $197 million hit to the state’s schools.

Wichita, the state’s largest district, stands to lose $22 million.

Rep. Scott Schwab, R-Olathe, went up to the lectern Thursday morning and confessed that he had been arrogant in the past and had been part of the problem. He changed his vote to yes in an effort to be part of the solution, he said, and encouraged his colleagues to do the same.

Some House members oppose HB 2109, which crawled to passage in the Senate this past weekend, because they want to return to the tax cuts passed in 2012 and either repeal or tweak them. Others want to go into the budget and look for more cuts before approving the more than $400 million in taxes contained in the bill.

Rep. Kyle Hoffman, R-Coldwater, told them neither of those things was going to happen today and argued lawmakers should vote in favor of the bill to prevent cuts.

But some lawmakers refused to budge and when the bill’s impending failure became apparent, support for the bill plummeted.

Rep. Barbara Bollier, R-Mission Hills, a moderate Republican who opposed the bill, said it failed to address what she see as the cause of the state’s revenue problems, the tax cuts it passed in 2012.

“Starting in 2012 we put a tax plan in place that’s failing. And this in no way helped resolve that issue. It just prolonged the agony. So there was no reason to perpetuate bad policy,” Bollier said. “We keep saying we need real revenue reform. We might get it now.”

Rep. John Whitmer, a freshman Republican from Wichita, said his constituents had urged him to vote against the bill. Whitmer and other conservatives say that lawmakers need to do more to curb spending before they move forward with any tax increase.

“For me, it’s just hard to ask the folks to pay more when I don’t think we’ve looked for enough cuts,” he said.

Rep. Mark Hutton, R-Wichita, has led a coalition of 25 lawmakers seeking to pass a compromise solution. Hutton had tried unsuccessfully to court votes for HB 2109 after his previous efforts to pass another bill that would have put 330,000 business owners back on income tax rolls failed to gain traction and had inspired a veto threat.

“My guys were on board,” Hutton said. “Our group stood in the gap trying to prevent a financial calamity for this state and the rest of this House stood down. The Democrats, the moderates and the hardcore conservatives all stood down, while we stood for Kansas.”

Hutton and some of his cohort did change their votes in the final moments after its impending failure became clear.

Rep. Marc Rhoades, R-Newton, who leads a coalition of conservatives, voted in favor of the bill, but many members of his group did not. Rhoades said with frustration Thursday morning that lawmakers are "all over the map.”

The plan would have raised the state’s sales tax from 6.15 percent to 6.55 percent on July 1. The sales tax rate on food would be cut to 4.95 percent the following year.

It also would have eliminated most itemized income deductions and reduced the deductions for property tax and mortgage interest by 50 percent. The deduction for charitable contributions would have remained intact.

The Senate had joined these polices with a controversial expansion of a scholarship program that steers public dollars toward private schools and another that would have restricted city and county governments from raising property taxes without a public vote.

A provision that requires a person to have a Social Security number for one year before qualifying for a tax credit has also drawn scrutiny, because it would potentially prevent families with infants from claiming them for tax credits.

Merrick had called the plan the last train out of Topeka, but his tax chairman, Rep. Marvin Kleeb, R-Overland Park, said after its defeat that lawmakers would work on crafting a new plan.

“We’re going to need a coalition here. We need to see who is serious about solving the financial aspect about this,” Kleeb said.

House leaders’ decision to enforce a call of the House on Wednesday night and Thursday morning – for a combined time of around 41/2 hours – was questioned from some lawmakers.

House Minority Leader Tom Burroughs, D-Kansas City, argued that the rule requires the speaker to instruct the Kansas Highway Patrol to search for missing members and questioned how seriously that search was conducted.

Rep. Brett Hildabrand, R-Shawnee, said in a message that he was in Arizona on a business trip, which he had previously delayed.

“We’re a citizen legislature in KS and because of the long session, many of us are running into conflict with our outside employment,” Hildabrand wrote in a message.

Rep. Amanda Grosserode, R-Lenexa, said in a message that she was on her way to Las Vegas to attend her sister-in-law’s wedding.

House Majority Leader Jene Vickrey, R-Louisburg, said that the vote was continued from Wednesday into Thursday morning because legislative leaders were still working on building consensus.

Bollier called the entire scenario a sign of the state’s collapse.

“I’m speechless. I really am. I had nightmares about it last night about how clearly this place is collapsing,” Bollier said. “There seems to be no method to anything. I would call it madness.”

This story was originally published June 11, 2015 at 9:29 AM with the headline "Kansas House rejects tax plan to increase sales tax, close deductions."