Kansas lawmakers resumed talks on income tax cuts Tuesday with an eye to reaching an agreement Wednesday.
The House and the Senate stood just a fraction of a penny apart on agreeing to an overarching plan to lower income taxes even deeper than what was enacted last year.
On Tuesday, the Senate inched closer to a position taken by the House last week. That opened the possibility that this year’s legislative session could soon draw to a close.
Meanwhile, a separate committee reached a tentative agreement on a new budget for fiscal years 2014 and 2015 that would cut higher education only 1.5 percent each year.
Details of the $14.5 billion proposal for the fiscal year that starts in July weren’t immediately released Tuesday. But the possible House vote Wednesday would be the first by either chamber since legislators returned May 8 from a monthlong break.
Most of the attention this legislative session has been focused on income taxes and Republican Gov. Sam Brownback’s drive to eliminate them — what’s been dubbed the “march to zero.”
The chief point of contention has been whether to renew a six-tenths of a penny addition to the sales tax that the Legislature approved in 2010 to help the state weather the recession.
That sales tax is scheduled to lapse June 30. Brownback wants it renewed to help fill a hole in state revenues created by income tax cuts he signed into law last year and to reduce income taxes even deeper in the future.
The Senate has pushed for renewing the entire six-tenths of a penny, while the House has advocated for half that much.
On Tuesday, the Senate lowered its demand slightly. Under the most recent Senate plan, the state sales tax would be 6.25 cents — instead of its earlier demands to set it at 6.3 cents. The House has proposed a state sales tax of a flat 6 cents.
“It’s a legitimate offer,” said Sen. Les Donovan, a Wichita Republican and chairman of the Senate tax committee. “It’s a path to get out of here.”
House tax chairman Richard Carlson, a St. Marys Republican, called it a “serious offer” and said he expects to return to the negotiating table Wednesday morning.
Here is a look at the other key differences between the House and Senate plans that need to be resolved in order to pass a budget and end the legislative session:
• The Senate would lower the top tax bracket to 3.5 percent in 2017 from the existing 4.9 percent level. The latest House offer would reduce the top bracket to 3.8 percent.
• The Senate would reduce the bottom tax bracket to 2.5 percent in 2017 from 3 percent currently. The House takes the lower tax bracket to 2.1 percent by 2017.
• The House and Senate differ by how much itemized deductions would be reduced. The Senate wants to eliminate them by 2018 as income taxes are reduced. The House wants to keep at least a portion of them.
• Both chambers want to eliminate deductions for gambling losses.
• Both chambers also agree that standard deductions for head of household and married couples filing jointly should be cut.
The head of household deduction would drop to $5,000 from $9,000. The deductions for married couples would be cut to $6,500 from $9,000.
• The House wants to restore part of the food sales tax rebate program that was eliminated this year. The Senate’s offer did not include keeping the program.
Both the Senate and House had been meeting for abbreviated periods this week as lawmakers awaited the outcome of tax negotiations.
Brownback declined to comment on the Senate’s latest offer.
“I am not going to negotiate publicly,” Brownback said. “These guys need to negotiate, and they are, and that’s good.”