TOPEKA — Kansas House leaders may wait until Tuesday to hold a high-stakes debate on increasing sales and other taxes, according to the House taxation chairman.
The Senate passed the bill Sunday in an effort to fund the budget and end the longest legislative session in the state’s history.
Gov. Sam Brownback indicated Monday morning that he would sign it if the House sends it to his desk.
“People have looked at 40, 50 iterations of a tax bill. … It’s time to get this done. It’s past time,” Brownback said. “This is a good plan, and it’s been thoroughly discussed. And it’s time to move it forward, because I will sign it.”
Brownback said that he was calling lawmakers from the hospital Sunday – when his first grandchild was born – to urge them to support the bill. “My wife was complaining about that,” he said.
The state originally faced an $800 million deficit this year, in large part because of 2012 income tax cuts. Half of that was closed with fund transfers and other budget moves. Sunday’s tax bill would fill the rest of the gap.
Brownback continued to push back against the notion that the state’s budget problems have been caused by tax cuts he ushered into law in 2012 instead blaming the issue on spending.
“I don’t think it’s fair to discount the cost side,” he said, pointing to the costs of shoring up the state’s pension system.
The bill protects a tax exemption for business owners established in 2012. That’s a sticking point for some House members, said Rep. Marvin Kleeb, an Overland Park Republican.
Other major policy changes – ones that would require local governments to seek voter approval to increase property taxes and put public dollars toward scholarships for children attending private schools – have also drawn scrutiny.
“There’s some policy here that needs to be discussed,” Kleeb said.
The House took off Sunday, while the Senate battled all weekend to pass a bill.
The House – originally expected to debate the bill Monday afternoon – will reconvene at 6 pm. However, Kleeb said lawmakers would more likely debate the bill on Tuesday.
“Our leadership is not interested in this work-all-night, let’s-wear-people-down sort of approach to getting policy passed,” Kleeb said.
Asked whether there’s a plan B if House members vote down the bill, Senate President Susan Wagle, a Wichita Republican, said that allotments – automatic budget cuts the governor has the power to enact – could be necessary. She said the House needs to pass the Senate’s plan or offer an alternative.
Here are the major provisions of the tax plan the Senate passed. It generates about $471 million, leaving the state with an ending balance of about $75 million.
▪ Raise sales tax from 6.15 percent to 6.55 percent; $187.7 million. Sales tax on food to drop to 4.95 percent in July 2016.
▪ Eliminate most itemized deductions, reduce taxpayers’ deductions for mortgage interest and property taxes paid; $97 million.
▪ Eliminate food sales tax credit for poor families, seniors and people with disabilities; $15 million.
▪ Increase cigarette tax by 50 cents a pack to $1.29; $40.4 million.
▪ Provide amnesty on penalties to people who agree to pay back taxes owed; $30 million.
▪ Postpone scheduled decrease in income tax rates on wage earnings; hold rates at 2.7 percent in low bracket and 4.6 in upper bracket; $26.4 million.
▪ Tax guaranteed payments to owners of pass-through businesses who currently pay no state income tax; $23.7 million.
▪ Require Social Security number for tax credits; $15 million.
▪ A separate bill increased the “privilege fee” tax on managed-care health plans; $47.8 million.
▪ Sets Dec. 31, 2019, as an automatic expiration date for virtually all sales and property tax exemptions, except those for churches, agriculture, business-to-business transactions and select health-care-related purchases.
▪ Establishes a tax study commission to determine whether any exemptions eliminated by the automatic expiration should be retained.
▪ Requires cities and counties to hold a public election to raise property tax income by more than the rate of inflation.
▪ Allows private schools to directly receive money from a tax-credit funded scholarship program, to accommodate students whose parents pay for schooling by tithing to their church.
▪ Starting in 2019, requires automatic tax cuts if state income grows more than 3 percent in a year, adjusted for required spending on pensions and Medicaid.