Senate plan relies on tax hikes

TOPEKA — A Senate panel has proposed a state budget that relies on more than $400 million in tax increases.

The Senate Ways and Means Committee adjourned Wednesday night without deciding how to raise the money. Members will not return until the Legislature reconvenes next Wednesday to deal with the state's budget shortfall.

The $5.8 billion budget proposal that the Senate Ways and Means Committee will send to the full Senate does not include deep cuts for schools or social services.

In addition, committee members also restored about $40 million in cuts programs otherwise would have faced, including $1.5 million for hospice care, $3.1 million for home and community-based services fee waivers and $8.5 million for mental health grants and aid.

That means they need to find about $412 million in tax increases, chairman Sen. Jay Emler, R-Lindsborg, has estimated.

Ideas include increases in taxes on sales, alcohol, cigarettes and tobacco products, and a new tax on sugary drinks. Other revenue proposals floating about the building include eliminating sales tax exemptions, selling state buildings or modifying the state income tax structure.

Sen. Jean Schodorf, R-Wichita, a member of Ways and Means, said she thought the committee might have to come back and make more cuts to the 2011 budget proposal.

"This gives you a good indication of how tense things are and how bad the situation is," she said.

Lawmakers must either cut spending or raise taxes or both to cope with the state's budget shortfalls. Last year they cut spending by more than $1 billion. Some say cuts cannot continue; others say the state must live within its means.

The committee stipulated that if the state does not come up with enough money to cover expenses in July, when revenue estimates are adjusted, most state agencies will face cuts. The bill exempts education and public safety programs from the reductions, but all other parts of state spending would share equally in the cuts.

The budget proposal passed the committee 8-2, with Republican Sens. Pat Apple of Louisburg and Ty Masterson of Andover voting against the draft.

The House Appropriations Committee begins discussing its budget proposal today. House Republican leadership has so far proposed cuts and no tax increases.