Top Republicans in the Kansas House worked on a new tax plan Friday, seeking a magical mix of personal income tax cuts and new sales tax revenues that would let lawmakers wrap up business for the year.
House and Senate negotiators briefly resumed talks in how to respond to the massive individual income tax cuts enacted last year meant to stimulate Kansas' economy. But House Republicans went into the meeting with no new proposal following Thursday's overwhelming rejection of a plan to decrease the sales tax on groceries.
"We're still back at looking at what we can do to actually make a plan that can pass the House," said Rep. Richard Carlson, a St. Marys Republican, and the House's lead negotiator on tax issues. "We don't have it yet, because we had to regroup from last night quite a bit, quite frankly."
Republican Gov. Sam Brownback proposed keeping the sales tax at 6.3 percent to prevent budget shortfalls — and to allow for additional income tax reductions. The sales tax is scheduled to drop to 5.7 percent in July because of a 2010 pre-Brownback tenure law that temporarily boosted the rate to balance the budget.
GOP leaders have been unable to agree on the sales tax: Senators embraced Brownback's proposal, while the House passed a plan earlier this year to allow the sales tax to drop to 5.7 percent and institute less aggressive income tax cuts than the governor sought. The latest failed plan would have cut the sales tax on groceries to 4.9 percent; all other items still would have been taxes at 6.3 percent.
Still floating around the Statehouse is the proposed $14.5 billion budget for each of the next two fiscal years, starting in July. A separate team of budget negotiators agreed two weeks ago, but reopened talks Thursday to lessen cuts in funding for community colleges and technical colleges.
The Legislature's annual session reached its 98th day Friday. The state constitution specifies 90-day sessions, though legislators can meet longer. GOP leaders had promised that lawmakers would finish in only 80.
Democrats oppose efforts to shift most of the burden of financing state government to the sales tax, viewing it as unfair to poor families that tend to pay a higher percentage of their incomes to the tax than do wealthy ones. Their unwillingness to vote for any plan so far has complicated efforts in the House.
"This needs to be fixed next session, when the people get to weigh in on it," said Sen. Tom Holland, a Baldwin City Democrat, referencing next year's elections.
Brownback and most Republicans believe the state will boost its economy if it phases out personal income taxes. But some GOP House members view any adjustment to the sales tax as a tax increase.
Revenue Secretary Nick Jordan sought to lessen House Republicans' resistance by reminding them during a meeting that last year's cuts still would dwarf any net revenue gain over the next five years.
"Don't fall into the opponents' talking points that this is a tax increase," he said.
And Brownback told reporters that he wants to avoid "a skewed view" of tax issues.
"It does matter, what window frame you look at," he said. "We have made substantial tax cuts in the state of Kansas, I think, by anybody's standards."