Gov. Sam Brownback’s tax cuts were sent reeling overnight as lawmakers managed to break through political gridlock and disarray that has dominated the Kansas Legislature for weeks by passing a tax plan that dissolves the tax policy the governor has made a central part of his tenure.
The bill passed the Senate after midnight and Brownback responded immediately by announcing he would veto the legislation.
“Senate Bill 30 is a $1.2 billion tax hike, making it the largest in state history,” Brownback said in a statement early Tuesday. “This is bad for Kansas and bad for the many Kansans who would have more of their hard-earned money taken from them.”
“We expected that,” said Senate Majority Leader Jim Denning, an Overland Park Republican who voted for the bill.
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An effort to override the veto could come this week.
The House passed the tax plan on a 69 to 52 vote, and the Senate agreed to the plan on a 26 to 14 vote after midnight.
Lawmakers also sent a new school finance formula to the governor’s desk as the Legislature cleared its docket of much of the work that had led them to the 108th day of one of the longest legislative session’s in state history.
The tax plan is estimated to bring the state more than $1.2 billion over a two year span as Kansas faces projected budget shortfalls and continued questions over its future fiscal health.
The tax increases included in the plan end Brownback’s tax exemption for certain business owners, raises income tax rates and brings back a third tax bracket.
“I think we’re going to stop the hemorrhaging with this bill,” Sen. Randall Hardy, a Salina Republican, said.
Sen. Rob Olson, an Olathe Republican, questioned “how anybody can support” the tax bill.
“I’d hate to be a taxpayer in Kansas tomorrow,” Olson said
A block of House Democrats had helped defeat many of the tax proposals floated by Republican leaders over the last month, citing concerns that the bills either failed to raise enough money or left other issues unaddressed.
Enough Democrats joined with Republicans to pass the tax plan Monday night and Tuesday morning.
It’s never easy to raise taxes, Rep. Tom Sawyer, a Wichita Democrat, told his fellow lawmakers.
But he urged legislators to support the bill and to stop digging a hole for the state.
“We’ve got to fix it,” Sawyer said. “It’s time.”
The vote came as lawmakers’ window for ending the session appeared to be closing.
Lawmakers are on a tight timeline to finish passing budgets for future years, agree on a tax plan that can become law and send the school finance plan to Brownback’s desk.
State budget director Shawn Sullivan said in a statement before the votes Monday that further inaction by the Legislature will cause problems for state employees in just a few days time.
“The FY 2018 for state payroll starts at 12:01 a.m. on June 18,” Sullivan said in the statement. “Without action by the legislature, we do not have the necessary authority to pay state workers, causing difficult decisions to be made regarding the continued operations of state government.”
Before the tax vote, a pair of conservative Republicans watched their colleagues from the side of the House floor and admitted they were discouraged and frustrated by the course the tax discussion had taken as the Legislature tried to make it through its 108th day.
“I think we’ve been pushed to the brink,” Rep. Dan Hawkins, a Wichita Republican, said of he and conservative colleagues.
“I’m not willing to go this high,” Rep. Erin Davis, an Olathe Republican, said. “I’m not willing to take this step.”
Other divisions broke out on the new school finance formula approved by lawmakers.
Kansas schools will get a boost in funding under the bill, though Brownback will need to make a decision on the legislation before it can become law.
Lawmakers signed off on the new school finance formula on a 67 to 55 vote in the House and followed it up with a 23 to 17 vote in the Senate. They had already passed a similar version of the legislation in recent weeks, but the new bill represented the finished product of a weekend of negotiations between leading lawmakers in the House and Senate on school finance issues.
The new formula would add a net $488 million to state education funding over two years as the Legislature tries to please the Kansas Supreme Court’s demand that lawmakers create a new school finance system to address adequacy issues.
Democrats have said they are concerned that the court will view the funding increase as inadequate, while some Republicans have defended the formula and its structure.
“The last plan was good enough,” Rep. Larry Campbell, an Olathe Republican, said of an earlier proposal. “This one is better than good enough.”
Rep. Ed Trimmer, a Winfield Democrat, said he was concerned that issues with both the equity and the adequacy of the formula may displease the state’s high court.
He also warned that lawmakers may have to return to a special session if the court is displeased with the new formula.
“I will see you all in July,” Trimmer said in explaining his vote.
The new formula funds all-day kindergarten, according to the Kansas State Department of Education, and increases early childhood funding.
The legislation also expands a tax credit scholarship program that goes toward private school education, a flashpoint during this year’s education debate.
That program allows corporations and other selected companies to get a tax credit if they contribute to a scholarship-granting organization.
By signing off on the bill, lawmakers will allow individuals to get the tax credit for making a contribution.
Rep. Melissa Rooker, a Fairway Republican, said she was relieved after the new formula cleared the House.
School districts in Johnson and Wyandotte counties are expected to gain additional general state aid in the plan, according to an analysis provided to lawmakers.
“We need the governor to sign it,” Rooker said. “Fingers crossed he will. There’s so much uncertainty in the process. We needed to take this step and get this moving.”