TOPEKA — Kansas will avoid massive budget cuts after a plan to increase taxes crawled to passage in the Legislature on Friday.
But even some lawmakers who voted for it said it failed to address a cause of the state’s financial woes – the 2012 tax cuts. And some lawmakers accused Gov. Sam Brownback of bullying them into accepting a flawed plan.
Republicans, who hold supermajorities in the Kansas House and Senate, have been bitterly divided on taxes for weeks in the face of a $400 million budget hole. The legislative session stretched to 113 days, the longest in history.
The Brownback administration warned Thursday that it would cut the budget Monday if lawmakers had not acted by then. Officials raised the specter of either a 6.2 percent across-the-board cut, which would cost schools nearly $200 million, or a veto of budgets for the state’s regents universities.
At 4 a.m. Friday, the House was able to scrape together the 63 votes needed to pass the plan. Several members who voted for it were moved to tears before Rep. Blake Carpenter, R-Derby, cast the deciding vote.
A little more than 12 hours later, the Senate approved the plan 21-19 after an emotional debate.
Sen. Jeff Longbine, R-Emporia, accused the Brownback administration of perpetrating “political blackmail” in recent weeks by threatening to veto any plan that rolled back a 2012 exemption that removed more than 330,000 business owners from income tax rolls.
“This fix doesn’t fix the problem,” he said.
The 2012 tax plan also eliminated the top tax bracket and cut all income tax rates. Longbine said it has cost the state more than $1 billion and that the plan passed by the Legislature in a pair of bills failed to address that impact. The new plan will instead raise the sales tax from 6.15 percent to 6.5 percent in July and increase taxes on cigarettes by 50 cents a pack, among other things.
“To me, if you’ve got congestive heart failure you go to the cardiologist and not the dentist,” Longbine said.
He added that he wanted to watch the plan burn, but voted in favor of it to prevent cuts to the state’s schools, universities and disability services.
Budget director Shawn Sullivan, who observed the Senate debate, said that the warnings about cuts were not intended as threats but were meant to make lawmakers understand the gravity of the situation.
Brownback praised what he called “a pro-growth tax policy” after its passage.
“This bill keeps the state on a path of economic growth, creating well-paying jobs that benefit all Kansans. It continues our transition from taxes on productivity to consumption-based taxes,” he said in a statement.
Senate President Susan Wagle, R-Wichita, said her own moral compass wanted to close the tax loophole for business owners but that the governor had promised to veto any bill that did.
She also said such legislation would have had a difficult time passing the conservative Senate.
“It was the best plan we could put forward that gathered enough votes to pass on to the governor,” Wagle said about the final tax plan with limited enthusiasm.
In addition to increasing the sales tax rate, the plan eliminates most income tax deductions and reduces the property tax and mortgage interest deductions by 50 percent. The charitable contribution deduction will remain intact.
Senate Minority Leader Anthony Hensley, D-Topeka, called the plan “Robin Hood in reverse.”
“We’re asking poor people to pay more to keep a misguided, reckless tax policy in place,” he said.
Sen. Ty Masterson, R-Andover, said Democrats were trying to engage in class warfare and defended the business exemption. He contended that nothing prevented wage earners, such as secretaries, from going out and starting their own businesses, such as a nail salon or auto shop.
“It’s easy to sit there and be an obstructionist, vote no on everything and throw bombs,” he chided Democrats. “The adults are finally coming in the room. We’re going to get something done.”
The two tax bills, SB 270 and HB 2109, are projected to generate $384 million in revenue which, added to other legislation passed this year, would fix the state’s shortfall and leave a $36 million ending balance for fiscal year 2016, which begins in July.
House leaders are counting on the governor to cut the budget by $50 million to bring the ending total to $86 million.
Sullivan said the administration was working with state agencies to identify efficiencies.
The House discarded a Senate provision to reduce the food sales tax rate to 4.95 percent in July, but it restored a food sales tax rebate program that the Senate wanted to eliminate.
The amended plan also eliminates income taxes for 380,000 low-income Kansans in tax year 2016, an idea that was first floated by the governor late last month.
Democrats voiced concern that lawmakers would have a repeat of this session next year, because the tax plan addressed only half of the projected $800 million deficit. The other half of the hole was plugged largely with one-time transfers of money from other places, such as the highway fund.
The House did not begin its debate on the plan until 1:30 a.m. Friday.
House Democrats castigated Republican leaders for holding the debate when lawmakers are weary and most people are asleep.
But Republican lawmakers emphasized the urgency of the situation.
The first bill, SB 270, scraped by with 63 votes, the bare minimum for passage. The second, HB 2109, initially fell four votes short: 59-48 with 19 representatives missing.
House Speaker Ray Merrick, R-Stilwell, invoked a rule known as “the call of the House,” which pauses the vote and requires the Kansas Highway Patrol to search for missing representatives. He and other Republican leaders picked up their phones and pressed colleagues to back the bill.
“I need some movement,” he said emphatically into his phone within earshot of reporters seated nearby.
More than two hours later, Carpenter cast the deciding vote. He left the House chamber without answering questions.
Sen. Rob Olson, R-Olathe, who cast the deciding vote in the Senate, also would not answer questions. Olson had initially voted no, but changed his vote to break the deadlock.
“Sometimes it’s hard to get 63 votes,” Merrick reflected after the bill passed in the House. “That’s the way the process works. It’s a hard vote for Republicans raising taxes. It’s a real tough vote for me.”
Rep. John Whitmer, R-Wichita, a freshman lawmaker, came to the House lectern sobbing to urge his colleagues to vote in support of the bill.
“I voted for something I am not proud of, but I feel it’s what the folks need,” he said.
After the House debate, Rep. Jim Ward, D-Wichita, did not hide his disappointment.
“It’s like a Greek tragedy. You knew what the ending was going to be,” he said. “You just hoped against hope it would be different.”
▪ Raises sales tax from 6.15 percent to 6.5 percent.
▪ Eliminates most itemized deductions
▪ Increases cigarette tax by 50 cents a pack
▪ Postpones cut in income tax rates
▪ Provides tax amnesty
▪ Taxes guaranteed payments to owners of pass-through businesses
How they voted
Here’s how south-central Kansas lawmakers voted on HB 2109, to increase sales and other taxes, and SB 270, a companion tax bill. The House voted on both Friday; the Senate voted on HB 2109 Sunday and the second bill Friday.
Republicans voting yes: Steve Anthimides, Steve Brunk, Mario Goico, Daniel Hawkins, Dennis Hedke, Mark Hutton, Les Osterman, Joseph Scapa, Gene Suellentrop, John Whitmer, Wichita; Will Carpenter, El Dorado; Kyle Hoffman, Coldwater; Steve Huebert, Valley Center; Kasha Kelley, Arkansas City; Les Mason, McPherson; Virgil Peck, Tyro; Marc Rhoades, Newton; Joe Seiwert, Pretty Praire; Jack Thimesch, Cunningham; Kristey Williams, Augusta
Democrats voting no: John Carmichael, Gail Finney, Tom Sawyer, Ponka-We Victors, Jim Ward, Wichita
Republicans voting no: Mark Kahrs, Wichita; Steve Becker, Buhler; Pete DeGraaf, Mulvane; Jan Pauls, Hutchinson
Yes on 2109 and no on 270: Blake Carpenter, R-Derby
No on 2109 and absent on 270: Don Schroeder, R-Hesston
Democrats absent: Carolyn Bridges, Roderick Houston, Brandon Whipple, Wichita; Ed Trimmer, Winfield
Republicans voting yes: Les Donovan, Mike Petersen and Susan Wagle, Wichita; Steve Abrams, Arkansas City; Terry Bruce, Hutchinson; Dan Kerschen, Garden Plain; Forrest Knox, Altoona; Ty Masterson, Andover; Richard Wilborn, McPherson
Republicans voting no: Carolyn McGinn, Sedgwick
Yes on 2109 and no on 270: Michael O’Donnell, R-Wichita
Democrats voting no: Oletha Faust-Goudea, Wichita