Kan. Senate passes bipartisan plan for raising taxes to avoid deficit in next state budget

Kan. Senate approves bill raising taxes

TOPEKA, Kan. — A bill increasing Kansas’ sales tax cleared the state Senate late Thursday night, a victory for Democrats and moderate Republicans who hope to avoid cuts in social services and aid to public schools.

Senators’ 23-17 vote advances the measure to the House, where a similar bipartisan coalition is hoping for a quick up-or-down vote to send it to Democratic Gov. Mark Parkinson. If they pull it off, it will be over the objections of conservative Republicans, including the House’s GOP leaders.

“These leaders stood up, and protected those things which make our state great: quality schools, safe communities and a society that does not turn its back on those most in need,” Parkinson said in a statement after the vote. “There is still work to be done and challenges ahead, but we are moving forward, protecting what we have and building for the future.”

The tax bill would provide $314 million for state government programs during the next fiscal year. It would raise the 5.3 percent sales tax to 6.3 percent on July 1, when the new budget year begins — boosting the cost of groceries, clothing and many other consumer goods.

The tax bill would be necessary to balance a proposed $13.6 billion budget drafted by the same bipartisan group of senators. Their spending plan protects education funding and aid to public schools.

“We have to maintain the safety net,” said Senate Minority Leader Anthony Hensley, a Topeka Democrat.

The House was considering its own, bipartisan $13.6 billion budget proposal, and Democrats and moderate Republicans there believed it would be quicker and easier to push the Senate’s tax plan to passage than draft one of their own.

Parkinson has told the Republican-controlled Legislature he won’t accept further cuts to education funding or reductions in social services. But conservatives and many business owners and groups believe raising taxes will prolong the recession in Kansas.

Sen. Susan Wagle, a conservative Wichita Republican, said raising the sales tax will drive Kansas residents to buy groceries and other items in neighboring states.

“Forget about buying groceries in Kansas,” she said. “We do not have to do this to the people of Kansas. It’s just the wrong thing to do.”

The House’s conservative GOP leaders backed a plan that would have cut aid to schools by $86 million, though they said local districts could make up such a loss by tapping reserve funds or raising local property taxes. But that plan didn’t have enough support in the House, and proposals to cut education funding failed in the Senate.

Legislators have considered a variety of tax proposals as they’ve looked for ways to sustain state spending into the next budget year. But over time, they’ve narrowed their options to raising the sales tax.

That trend continued during the Senate’s debate Thursday. Businesses, mostly manufacturing firms, had been targeted for a $17 million tax hike, but the vote was 33-5 to remove that increase from the bill.

Later, the vote was 32-3 against a proposal from Sen. Roger Reitz, a Manhattan Republican, to increase the state’s cigarette tax by $1 a pack, to $1.79 and its 10 percent tax on other tobacco products to 70 percent.

Senators did amend the bill to expand an income tax credit for working class families. Many of them said it would help offset the sales tax hike for those families.

The full sales tax increase would remain in effect through June 2013. Afterward, it would drop to 5.7 percent, with some of the revenues from the tax dedicated to highway projects.

Meanwhile, the House made little progress toward passing a budget for the next fiscal year, despite three hours of debate on its bipartisan spending plan. House leaders suspended debate Thursday evening so Rep. Jene Vickrey, a Louisburg Republican, could attend his mother’s funeral.

Senate tax plan is Senate Sub for HB 2360.

On the Net:

Kansas Legislature: www.kslegislature.org