Kansas Legislature finally passes tax plan

The Kansas Legislature wrapped up its 2013 session early Sunday morning after passing a new tax plan and budget.

A marathon day at the capitol ended about 2:15 a.m. Sunday when the Legislature adjourned for the year after the Senate passed a controversial two-year budget that cuts higher education and corrections among other things.

Shortly after midnight, the House voted for a plan that puts the sales tax at 6.15 percent instead of letting it roll back to 5.7 percent this summer as promised by lawmakers three years ago amid the recession.

The plan cuts income taxes gradually from 2014 to 2018 and restores part of a food sales tax rebate program that was ended last year. But at the same time, the plan cuts itemized deductions for things like mortgage interest by half by 2018. It retains the deduction for charitable contributions.

Approval by the House ended days of feuding with Republican colleagues in the Senate over how much of the sales tax should be renewed.

The two chambers had been deadlocked since early May as they traded 11 plans before settling on one Saturday.

The tax plan, approved by the Senate earlier in the evening, will now go to Gov. Sam Brownback to sign.

Passage of the tax plan in the House was a key breakthrough to bringing the session to an end Sunday.

Lawmakers hurried throughout the day Saturday to mold consensus on taxes, a budget and a bill limiting controversial education standards that was demanded by conservative Republicans in the House.

By late Saturday night, the tax plan had passed and an education bill that would have limited Common Core standards was killed. The budget had passed the House and was waiting Senate consideration.

The long session Saturday began with House Speaker Ray Merrick of Stilwell coaxing Republicans into supporting a tax plan and budget they were slow to embrace.

“If you’re looking for the perfect solution, it’s not going to be here,” Merrick told the House Republican caucus Saturday morning.

By midday Saturday, a deal started taking shape on taxes leading to the plan that was ultimately approved.

Republican Gov. Sam Brownback, a Republican, had proposed keeping the sales tax at 6.3 percent to fill a budget hole created by income tax cuts enacted last year and then cutting income taxes even more deeply in the coming years.

The Senate had generally been agreeable to 6.3 percent, but the House had been reluctant to go that high because so many members opposed it when it was approved in 2010 or campaigned against the increase in election campaigns.

The latest proposal would lower income taxes but would cut itemized deductions –– except charitable contributions –– and slash the standard deductions for married couples and heads of households as well.

The plan agreed to by legislative leaders took a more measured approach to income tax cuts than what Brownback proposed in January.

The governor wanted to lower the top tax bracket to 3.5 percent by 2017 from the current 4.9 percent. He wanted to cut the lower tax bracket to 1.9 percent by 2016 from 3 percent currently.

The latest plan would drop the top tax bracket to 3.9 percent and the lower bracket to 2.3 percent.

The plan would raise about $777 million in new money over the next five years. The state would not see an overall decrease in revenue until 2018.

Brownback went public with his support for the plan just before it was considered by the Senate. He said it represented an overall tax cut when considered in context with last year’s income tax cuts.

“Much of the nation is watching what Kansas is doing as we prove that pro-growth strategies can lead to job creation and growth in our state,” Brownback said.

Others didn’t see it that way.

The tax plan is “nothing but disproven, discredited supply-side economic theory that benefits a very few at the expense of everybody else in this state,” said Sen. Tom Holland, a Eudora Democrat.

In other action on Saturday:

• With the minimum number of votes possible, the House approved a two-year budget for fiscal years 2014 and 2015 that cuts funds for colleges and universities by about $35 million.

The budget calls for spending $14.5 billion in 2014 and $14.3 billion in 2015. State spending in the current fiscal year is set at $14.3 billion.

The budget went to the Senate, which was expected to pass it early Sunday, ending the session.

• The Senate voted 24-12 to put limits on the national uniform teaching standards known as Common Core. But it was killed later by the House in a vigorous debate culminated by a narrow 58-55 vote to set the bill aside.

The education measure would have barred the state from spending any money on Common Core standards, including assessments, that were not approved on Jan. 14, the legislative session’s first day. The ban would be lifted after a year.

An 11-member oversight committee would have been appointed by legislative leadership and advise the governor and the Legislature about moving forward with Common Core. It would have disbanded in June 2015.

Lawmakers opposing the bill raised questions about its constitutionality because it could conflict with the duties of the elected state Board of Education.

Standards and assessments for math and English language arts, approved three years ago, would not have been affected. However, it would have delayed the implementation of new science standards that are going to be considered this month.

Conservative lawmakers in the House wanted to put the brakes on Common Core before they were willing to sign off on a budget. Many opponents view the standards as a cookie-cutter approach that emphasizes more testing and signifies a backdoor effort by the federal government to seize control of education.

The standards are state-led, not federal, but the U.S. Department of Education has supported them.

And states seeking competitive Race to the Top stimulus funds or seeking a waiver from the federal No Child Left Behind Act believed they had a better chance if they were implementing the Common Core standards.

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