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Deal on taxes and spending in Kansas could be near

Updated: 2013-05-08T01:23:51Z

By BRAD COOPER

The Kansas City Star

Lawmakers return to Topeka on Wednesday after a monthlong break with a deal just out of grasp to cut income taxes and balance the budget.

Even with deeply rooted differences over renewing a sales-tax hike, key lawmakers say a bargain could crystallize as early as this weekend.

“I have been very optimistic all along,” said Rep. Richard Carlson, a St. Marys Republican and one of the key budget negotiators. “We intend to find an amicable solution that benefits all the taxpayers in Kansas.”

No faction wants to repeat last year’s legislative session, when lawmakers approved controversial income-tax cuts and left angry after failing to draw new election districts.

“People don’t want to go through what we did last year and they’re talking,” said state Sen. Julia Lynn, an Olathe Republican and a member of the Senate tax committee.

Still, the shape of a solution remained unclear Tuesday after leadership teams from the House and Senate exchanged ideas in Oklahoma City. They’d met there at a conservative American Legislative Exchange Council conference last week.

House Speaker Ray Merrick said three or four tax plans remained in play but declined to provide details.

Merrick said state fiscal analysts were still running numbers on the plans to calculate their impact on future state budgets.

“It’s just seeing how the numbers come out,” Merrick said. “You don’t want to come back here and undo what you did because you made a strategic mistake.”

House and Senate budget negotiators were set to talk Tuesday about tax plans, but that meeting was abruptly called off. Talks seeking a compromise may pick up Wednesday.

The major issue facing legislators is the possible renewal of a six-tenths of a cent addition to the state sales tax approved in 2010 amid the depths of the recession.

That part of the sales tax is scheduled to come off the books July 1, but conservative Republican Gov. Sam Brownback wants it renewed to help bridge a massive revenue hole left by income tax cuts he signed into law last year.

Already dogged by slumping approval ratings, Brownback wants the sales tax to avert cuts in programs such as higher education.

However, he’s at odds with House conservatives who would traditionally be some of his strongest allies in the Statehouse. He provided critical help in getting many of them elected — as they campaigned against the higher sales tax — in 2012.

Twenty-four House members — mostly Republicans — voted against the sales tax when it was approved three years ago.

The Senate has backed Brownback’s plan to renew the sales tax and reduce income taxes even deeper between 2014 and 2017.

Not renewing the tax means making deep budget cuts, possibly to education, for which senators don’t seem to have much of an appetite.

Meanwhile, the House has passed a plan that lets the state sales tax drop to 5.7 cents from 6.3 cents. But that plan cuts income taxes far less aggressively than the Senate’s.

The differences between the two tax plans are central to how much the state ends up spending in 2014 and to what extent the state’s colleges and universities get cut.

While the House, for instance, would lower the sales tax, it also wants deeper budget cuts than the Senate has proposed.

The House would cut $122 million from the governor’s budget recommendation for fiscal 2014, including about $30 million for higher education.

Senators would trim the governor’s proposed budget by about $48 million and cut colleges and universities by about $15 million.

No one is certain how all this will shake out in the next few days.

“There is an agreement that neither side will end up getting 100 percent their way,” said state Rep. Marvin Kleeb, an Overland Park Republican who sits on the House tax and appropriations committees.

Some support exists in the House to move away from an income tax to more of a consumption tax, but Kleeb said lawmakers don’t want to be perceived as raising taxes by extending a sales tax that lawmakers promised to roll back in 2010.

“That’s the hurdle we need to get over,” Kleeb said.

Sen. Les Donovan, chairman of the Senate tax committee, said he hopes lawmakers understand the importance of getting this dispute resolved.

“It is a pretty grave situation,” said Donovan, a Wichita Republican. “We’ve got to get something done. There’s no more beating around the bush.”

To reach Brad Cooper, call 816-234-7724 or send email to bcooper@kcstar.com.

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