Democratic and moderate GOP state lawmakers spent much of this legislative session complaining about the unfairness of the state tax exemption for pass-through business income. They also noted how it was damaging the state’s finances without significantly boosting the state’s economy. Yet many of them voted last week against a bill to revoke the exemption.
Rep. Mark Hutton, R-Wichita, bucked Gov. Sam Brownback and House GOP leadership in leading the push to revoke the exemption. He began the campaign last year and was frustrated when GOP moderates and Democrats didn’t join him.
“Had the Democrats and moderate Republicans elected to enter budget negotiations, the outcome could have been much different,” Hutton wrote last June.
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This year there seemed to be growing momentum to revisit the exemption. Top GOP leaders in the Senate introduced a bill to significantly scale back the exemption, and a number of business owners testified in favor of eliminating it, arguing that it was unfair that their employees paid state income taxes while they didn’t.
But when the House finally held a vote last week, only 14 Democrats voted for the repeal, while 12 Democrats, including House Minority Leader Tom Burroughs, D-Kansas City, voted against it. Many moderate Republicans also voted against it. The measure failed 45-74.
The lawmakers had their excuses, of course. Some complained that revoking the tax exemption wouldn’t help the current-year budget shortfall and would only add about $61 million in additional revenue next fiscal year, because it wouldn’t go into effect until Jan. 1, 2017. They also complained that it wouldn’t entirely fix the state’s budget problems.
Though all that is true, ending the exemption was still an important part of a solution – and could have helped prevent some damaging budget cuts to important state services. And for the 2018 fiscal year, it would add more than $200 million in state revenue.
Democrats may have balked at voting for the bill because they wanted to force the GOP to clean up its own mess – and suffer the political consequences. Many moderate Republicans likely feared that groups such as Americans for Prosperity would target them during this year’s GOP primary, sending out postcards blasting them for voting to raise taxes. They may have made a political calculation that the bill might not clear the Kansas Senate, so it wasn’t worth voting for it and, in doing so, placing a target on their backs.
But if they are afraid to make tough votes and go on record for what they believe, why be a lawmaker?
To their credit, several lawmakers did stand up, including Reps. Henry Helgerson, D-Eastborough, and Tom Sawyer, D-Wichita, who spoke passionately about the need to revoke the exemption. But too many other Democrats and GOP moderates acted like cowards.