When Kansas lawmakers return to Topeka in May, they’ll face the same problems they did in January.
Lawmakers, who are in the middle of a three-week break, appear no closer to resolving the state’s fiscal crisis than when they kicked off their legislative session more than three months ago. House Minority Leader Jim Ward, a Wichita Democrat, gave a brutal assessment of the lack of progress.
“When we walked in the door in January, we had four crises. We had the crisis of a structurally unbalanced budget, an inherently unfair tax system, a school system that was inadequately funded and our health care system in crisis — hospitals closing, providers leaving our system,” Ward said. “As of today, we’re nowhere.”
Lawmakers passed a temporary budget fix, which is awaiting Gov. Sam Brownback’s signature, to get the state through June by tapping one-time sources of money, such as a long-term investment fund, and reducing payments to the state’s pension system.
But they’ll still face a shortfall of about $1 billion over the next two years after that, according to the state’s nonpartisan Legislative Research Department. That will require some combination of budget cuts or tax increases.
One thing complicating efforts to shore up the state’s finances is an order from the Kansas Supreme Court to enact a new school finance formula by June 30. Neither chamber has yet to vote on a bill, and even after a plan passes lawmakers will have to wait for the court to decide if it passes muster.
Most lawmakers have come to accept that a tax increase of some shape will be required, but so far the governor and Legislature haven’t agreed on what that tax package should look like.
Brownback and conservative supporters want a flat tax, but they lack the votes in the Legislature. A coalition of Democrats and moderate Republicans wants to restore a third income tax bracket like the state had before Brownback’s tenure as governor, but they lack the votes to override Brownback’s veto.
Ward accused Brownback of stifling a solution.
“It’s easy to point a finger at the Legislature and say they didn’t get anything done, but in Kansas it’s really, really difficult with our governor,” he said.
House Speaker Ron Ryckman, an Olathe Republican who has tried to negotiate a consensus plan with the governor and Senate leaders, said he was disappointed that lawmakers did not make more progress before leaving for their April break.
He said the break would give lawmakers a chance to hear from constituents and noted that the state would revise its revenue estimates later this month, providing a more accurate picture of the state’s finances. Both of those things will help push lawmakers toward a solution in May, he said.
“We’ll be in a better position when we get back,” Ryckman said.
Rep. Troy Waymaster, a Bunker Hill Republican, said he thought lawmakers were following “the normal flow” of recent legislative sessions.
But he admitted there’s still much work left on the table for lawmakers when they return in May. “It’s not over by any means,” Waymaster said.
Two years ago, Kansas experienced its longest legislative session in history. It stretched into mid-June as lawmakers struggled to find consensus on budget and tax policy.
And that was back when one political faction, the conservatives, dominated both chambers of the Legislature and the governor’s office. This year, Democrats, moderates and conservatives all hold sway over the legislative process after November’s election reshuffled the Legislature’s makeup.
Brownback vetoed a bipartisan bill in February that would have enacted three tax brackets and rolled back his signature policy, an income tax exemption for more than 330,000 business owners.
Brownback made a major concession in early April by endorsing a plan that would have eliminated the business exemption, but that plan also would have enacted a flat tax of 4.6 percent, increasing the tax rate for low-income Kansans. That made it unpalatable for moderates and Democrats.
When it became clear that the plan would fail, only three lawmakers voted for it in the Kansas Senate.
Asked if he would oppose any bill that adds tax brackets to personal income taxes, Brownback hedged his answer during a news conference earlier this month.
“I’m not going to put parameters out right now,” he said. “I think this is a time for discussion. I’ve been having a lot of discussions with a lot of legislators, and so I’m going to listen and watch, talk.”
Brownback called the tax and budget discussions in Topeka “a really difficult situation.”
“We’ve dealt with taxes a number of times here,” he said. “They often will take a hundred iterations to come up with something that is something that people can sign off on. It’s not unusual.”
It takes a certain amount of time in a session to get fully formed negotiations to move forward, Brownback said.
“When you get in a difficult situation, it almost always moves to the end of the session,” he said.
Rep. Steven Johnson, an Assaria Republican who leads the House tax committee, said the fact the Senate voted down the flat tax “identifies one of the roads we probably don’t go down.”
“So that’s progress; you identify which choices you may not follow,” Johnson said.
Moderate Republicans and Democrats are pushing for a large revenue package, but there are still hardline conservatives who will oppose any tax increase.
“The liberals don’t like a flat tax and the conservatives don’t like any tax,” said Sen. Steve Fitzgerald, a Leavenworth Republican.
And while conservatives don’t have the votes to pass major tax changes they’d like to see, they still have enough power to keep moderates and Democrats from changing the law — as long as Brownback continues to veto bills.
“The conservatives are in the preferred position, because with the governor in Cedar Crest, they can just play defense,” said Chapman Rackaway, a political science professor at Fort Hays State University. “The moderates and Democrats, they have to play offense.”
Senate President Susan Wagle, a Wichita Republican, said coming to an agreement on a tax package is “probably the most difficult thing any state Legislature would have to do.”
Wagle said she’s already told senators that they will be working through the weekend when the Legislature returns May 1 for its wrap-up session.
“I’d say our constituents across Kansas are just as divided as the Senate body is,” Wagle said.
Sen. Laura Kelly, a Topeka Democrat, said the Senate has done a poor job of “actually coming up with a plan” but that the House “has crafted some legislation that might have legs.”
Sen. Dinah Sykes, a moderate Republican from Lenexa, said she still thinks lawmakers will need to override the governor’s veto on a tax plan. An override attempt in February succeeded in the House but fell three votes short in the Senate.
“We are so close, but not there yet,” Sykes said. “We’re going to have to figure out a compromise somewhere.”
Sen. Julia Lynn, an Olathe Republican, said a tax increase would have to be “modest.”
“I’m a conservative, but I’m a pragmatic conservative,” Lynn said. “I’m a solution-oriented conservative. There are other people that will dig in, but they’re not bringing anything to the table.”
Lynn said people need to get in a room and hash out a solution.
“I don’t know how we’re going to get out,” she said. “I just know that we will and, in the end, we’re going to have to live with what we’ve done.”