Kansas budget fix hits roadblock; debate over tax hikes, budget cuts called off

The budget cuts and tax increases have been called off for now.

Kansas lawmakers headed to the Senate floor early Thursday set to begin debate on legislation that would raise taxes and slash this year’s budget to help balance the state’s finances.

But just after 8 a.m. the Senate went into recess so Republicans and Democrats could talk about the bills away from the Senate floor.

They then called off the debate entirely, with Republican Senate leaders saying they didn’t have the 21 votes required to pass the legislation.

They said they had the votes earlier in the week, but support around the legislation fell through as discussions continued.

“When I came in at 8 a.m. this morning I thought that we would be working those bills on the floor,” said Sen. Caryn Tyson, the chairwoman of the tax committee. “So, I was surprised, as most.”

Republican Senate leaders said they would also halt floor debate on legislation that doesn’t deal with the budget or taxes until bills are passed.

“We’re going to let people go home and think about the structural deficit and talk to their constituents and come back with a fresh bit of air on Monday,” Senate President Susan Wagle said.

There were clear frustrations in the Republican caucus this week as Senate leadership, moderates and conservatives tried to find an acceptable middle ground.

And on this bundle of bills, none could be reached Thursday.

“It’s basically squeeze off your air until you comply,” said Steve Fitzgerald, a Leavenworth Republican. “...The pressure will just keep going on until they get the votes they need to get something out. This is not unusual. This is just the way the machine works.”

The series of proposals would raise income tax rates, end a tax exemption for roughly 330,000 business owners and cut $128 million from K-12 education and roughly $22 million from higher education.

The state faces a roughly $320 million shortfall this year. That’s part of more than $1 billion in projected shortfalls the state is looking at through fiscal year 2019.

Republican Senate leaders moved quickly this week to push the legislation on to the floor for debate.

The proposed budget cuts have been met with dismay and hesitance from education officials.

But Republican Senate leaders said this week the moves are necessary.

That view wasn’t held by every Republican senator as the debate neared.

“It’s difficult,” said Sen. Carolyn McGinn, the chairwoman of the budget committee. “And I know leadership’s frustrated trying to get enough people on both sides to the table and evidently today we’re not there.”

Republican opinions were scattered over the proposals during a caucus meeting Wednesday.

A series of amendments, including one that would take more money from a state investment fund to help decrease the cuts, were discussed by the Senate GOP with no clear consensus forming by the end of the meeting.

That confusion carried over into Thursday morning, when the Republican Senate leaders called off the debate.

“We don’t feel a big need to put our body through a full day of debate if we don’t have the ability to pass the bill at the end of the day,” Senate Vice President Jeff Longbine said.

Senate Minority Leader Anthony Hensley said Democrats are considering their own tax change, which would reinstate a third income tax bracket.

“I think they went too far to propose a 5 percent education cut,” Hensley said of the GOP, as senators left the floor Thursday morning.

The third bracket, at a level of 6.45 percent, would apply to joint filers who make over $70,000 and single filers making more than $35,000.

Other proposals, including the Democrats’ plan, were mentioned frequently by lawmakers Thursday as they tried to explain what happened, where they stood and why the floor debate was called off seemingly at the eleventh hour.

Tyson said a piece of legislation that came about quickly after the Senate floor vote collapsed was a bill that left the income tax rates untouched.

That would leave only the LLC exemption, the 2012 tax cut for roughly 330,000 business owners, on that bill.

Both Republican and Democrats have said they want to end that tax cut, but whether or not that would be part of a larger tax plan is still far from certain.

For now, the magic number Senate Republicans want to hit is 21 votes.

That would mean the legislation could pass out of the Senate and move toward the House.

But there are concerns that 27 votes, or a veto-proof majority, will be needed if Gov. Sam Brownback moves against either the budget cuts or the tax increases.

“I think Gov. Brownback has pretty much drawn the line in the sand in terms of making sure that the LLC loophole stays in place,” Hensley said, maintaining that 27 votes would be necessary. “That’s his so-called legacy.”

Republican leaders said whatever happens, they will have to move quickly.

“Our focus needs to be budget and tax,” Longbine said. “Every day that we don’t get a (budget cut) bill done is another day that our agencies don’t have time to react.”

This story was originally published February 9, 2017 at 9:25 AM with the headline "Kansas budget fix hits roadblock; debate over tax hikes, budget cuts called off."