Furloughs loom in Kansas if legislature doesn’t reach budget agreement
All nonessential state workers will be immediately furloughed if the Kansas Legislature does not pass a budget by June 7, and Gov. Sam Brownback will veto proposals from legislators to increase business taxes, administration officials warned lawmakers Sunday.
Lawmakers got the news just before the Senate began debating tax policies Sunday. That debate continued into the night.
Budget Director Shawn Sullivan said during a meeting of GOP senators that the state is not authorized to pay workers beyond June 6 without a budget for the fiscal year beginning July 1 because of state payroll rules.
Revenue Secretary Nick Jordan also announced at the same meeting that the governor intends to veto any proposal to restart income taxes on the profits of business owners and farmers, except for a modest plan outlined by Brownback himself Saturday. The meeting was open to reporters.
The statements marked an aggressive shift in tone from the Republican governor’s administration toward the GOP-dominated Legislature. Republican legislators remain sharply divided over how best to close a projected budget shortfall of $406 million in the next fiscal year, and their annual session has become one of the longest ever.
“The governor has said they need to get this job done,” said Brownback spokeswoman Eileen Hawley.
Brownback unveiled a proposal Saturday that would fill the budget gap primarily by raising the state sales tax to 6.65 percent from 6.15 percent, eliminating most personal income tax deductions and increasing the cigarette tax by 50 cents per pack, to $1.29 from 79 cents.
His plan would raise $24 million during the next fiscal year by taxing compensation that business owners guarantee themselves, regardless of their profits. Hawley said it’s merely closing a loophole.
Jordan said the governor will veto any stiffer tax increases on business owners.
Sen. Steve Abrams, an Arkansas City Republican, offered an amendment to close the budget hole by closing a sales tax exemption.
“It’s basically about removing exemptions,” Abrams said in a GOP caucus meeting, arguing that doing so would allow the state to avoid increases to sales taxes and income taxes.
Abrams’ plan would close a sales tax exemption on property and services for public and nonprofit hospitals and blood banks. That would bring in $177 million.
His plan would also close a pair of exemptions that cover property bought by schools and building costs, which together would bring in about $126 million.
Abrams would close a similar exemption for youth organizations, such as the Girl Scouts and Boy Scouts, when they purchase property, which would bring in about $3 million.
Sen. Molly Baumgardner, a Louisburg Republican, raised concerns during the caucus meeting that taxing hospitals and Boy and Girl Scouts would spark public backlash. Abrams said any tax plan would be viewed as targeting someone.
Abrams’ plan includes the closure of exemptions for machinery and equipment, to bring in more than $200 million.
The closure of the various exemptions would bring in $517 million.
In other legislative news, some Republican senators had an overnight change of heart about a proposed budget for the state’s court system, allowing it to pass.
The Senate approved the measure on a 25-14 vote Sunday. The $131 million spending plan for the fiscal year beginning July 1 was drafted by negotiators for the House and Senate.
House approval would send the measure to the governor.
Senators voted 21-18 against the same measure Saturday, seeming to force more talks with the House.
This story was originally published May 31, 2015 at 10:08 PM with the headline "Furloughs loom in Kansas if legislature doesn’t reach budget agreement."