Brownback tax cut on chopping block if bill continues to advance in Kansas House

Kansas lawmakers may have the votes to dismantle part of Gov. Sam Brownback’s signature tax policy if House action Wednesday is any indication.

The House gave initial approval to a bill that would raise income tax rates and end a tax cut for roughly 330,000 business owners.

Brownback, who has continued to champion the tax cuts, said he won’t sign the bill if it makes it to his desk.

“This is just not the way to go,” Brownback said. “I don’t support this.”

The bill passed with 83 legislators voting in favor and 39 voting against. Supporters of the House bill would need to pick up one more vote to override a veto.

“It was a little higher than I anticipated,” said House Speaker Ron Ryckman, an Olathe Republican who voted against the bill. “We’ll see the final action numbers tomorrow.”

It still needs to pass a final vote that could come Thursday to move out of the House.

It would then need to be taken up and passed by the Senate before it could make it to the governor’s office.

The amended tax proposal would bring in more than $1 billion over the next two years, according to state estimates.

“I’ve never voted for a tax increase in my entire career, but I did it today, and I did it because this is the best bill that we will get,” said Rep. Stephanie Clayton, an Overland Park Republican.

But Clayton said the bill doesn’t get the state “all the way” to solving its financial problems and leaves Kansas without a cushion if things go wrong.

There had been talk that the more moderate Legislature — featuring a bevy of freshman lawmakers who campaigned on closing the so-called LLC loophole for small businesses — may be able to push through a tax plan that would help the state mend its budget issues.

Based on the initial vote, that seemed to be the case.

Rep. Tom Cox, a freshman Republican lawmaker from Shawnee, said he doesn’t love raising income taxes.

But Cox said he doesn’t like an unstable budget and the possibility of deeper cuts.

“We didn’t run to focus on ‘Oh, can we get re-elected in two years?’ ” Cox said. “We focused on, the state is in a bad situation and there’s things we know we need to do to fix it and we’re willing to make those decisions.”

Republicans and Democrats alike said Wednesday’s vote sent a strong signal.

“It had widespread support,” said Don Hineman, the Republican House majority leader from Dighton who voted for the bill. “It’s pretty unusual to pass a tax bill with that number of votes, and especially on Feb. 15.”

Rep. Kathy Wolfe Moore, a Kansas City Kan., Democrat, said there was an expectation the bill would do well, but she still was surprised by the vote total.

“I think that, probably, people got the message that the constituents wanted it fixed,” Wolfe Moore said. “And I think especially the new legislators were all out on the campaign trail and they heard they want it fixed. So that’s fabulous.”

Brownback’s 2012 tax cuts, which have been criticized by both moderate Republican and Democratic members of the Legislature, created the tax exemption for roughly 330,000 business owners, trimmed income tax rates and threw away the third tax bracket.

“I’m feeling good about tomorrow,” said Rep. Tom Sawyer, a Wichita Democrat, who amended the tax plan to its current state in an earlier House committee meeting. “I’m also feeling good if the bill does get through the process and gets vetoed, there’s a chance it could be overridden. This sends a good message to the governor that the House is serious about fixing the problem he caused.”

No lawmakers on either side of the issue stepped forward to debate the bill before the vote was made Wednesday.

Rep. Erin Davis, an Olathe Republican who voted no, said “it was really interesting that we just passed a billion dollar tax increase in what, I don’t know, 30 seconds or something like that?”

“It’s a recognition that we have issues that we have to have solutions for,” Davis said. “It puts people like me that are more conservative in a difficult position because had the LLC or pass through exemption been repealed in 2015, we wouldn’t be needing to raise taxes by this amount.”

The House plan was the first tax proposal to make it to a full vote in the Legislature.

The state is facing more than $750 million in projected budget shortfalls over the next two years.

A separate shortfall of roughly $320 million this year cannot be closed through the tax increases included in the bill.

An effort by the Senate to put a tax proposal to a floor debate fell apart last week after Republican leaders found they didn’t have the votes to pass the plan.

The plan put forward Wednesday keeps the lowest income rate in place. It then raises the second rate to 5.25 percent and brings in a third rate of 5.45 percent.

That third bracket would cover single filers who make more than $50,000 and joint filers making more than $100,000.

Rep. Troy Waymaster, the chairman of the House budget committee who voted against the bill, said the legislation will help discussions as the state moves forward on future budgets.

“Even though this passed with the numbers that it did, it is not my intention to basically take this as a blank check,” said Waymaster, a Bunker Hill Republican.

Brownback signaled to a small crowd of business owners Wednesday afternoon that the debate over tax increases may be far from over.

During a short speech, he asked the roughly 20 people in the room to talk to lawmakers and take a stand against the tax bill.

“I don’t want to keep you long because I want you getting out in the hallways and talking with members here about ‘Don’t raise my taxes,’ ” Brownback said.

This story was originally published February 15, 2017 at 1:42 PM with the headline "Brownback tax cut on chopping block if bill continues to advance in Kansas House."