Kansas lawmakers are attempting to thread a needle on a tax proposal that will gain Gov. Brownback’s support or garner enough votes in both houses to override a potential veto. Leadership scrapped two tax increase proposals last week, canceling votes twice.
A weekend off didn’t appear to get lawmakers any closer to a tax deal. Monday legislators received emails from the Save Kansas Coalition courtesy of four former Kansas Governors. The emails asked legislators to stay in Topeka as long as it takes to find a true fix, rather than partial measures to fill a projected $900 million shortfall.
Former Democratic Govs. Kathleen Sebelius and John Carlin and Republican Govs. Bill Graves and Mike Hayden signed the letter, which uses code words in support of tax increases.
“As the session moves forward, know we stand in full support for comprehensive solutions that provide a structurally-sound budget, adequately fund schools, and enable the state to provide essential services and infrastructure investments for Kansans,” it reads.
Rep. John Whitmer, a Wichita Republican, fired back at the former Governors saying their view of the budget process comes safely from the “cheap seats.”
“With all due respect, if these former Governors want to vote for the largest income tax in Kansas history, raising taxes on the working poor and the middle class, I suggest they run for office again on that platform and do it themselves,” Whitmer responded.
Tax policy negotiations continue this week, but it appears there’s little support for two bills working their way through the Senate. One proposal would create a flat income tax rate. A similar proposal received only three votes weeks ago. Another proposal would roll back a signature LLC-tax incentive–a solution most lawmakers appear to support.
However, at least one legislator told the Topeka Capital-Journal last week that some legislators are using the LLC-rollback as a bargaining chip to increase other taxes. Sen. Laura Kelly, a Topeka Democrat, said closing the so-called LLC-loophole doesn’t raise enough revenue. Approximately 330,000 Kansas business owners take advantage of the LLC-tax exemption.
Kansas faces a $900 million projected shortfall over the next two years, and eliminating the LLC-tax exemption won’t close that gap.
“If we take that part out of the overall tax plan, we take all of our leverage out,” Kelly told the Topeka paper. Though many lawmakers campaigned on eliminating the tax incentive to balance the state’s budget, Kelly admitted that wouldn’t do the trick.
“The real money in the tax cuts was not in that provision, it was the reduction of the (personal income tax) brackets,” she said.
Sen. Ty Masterson, an Andover Republican, called Kelly’s comments an admission that “the goal to grow government was always predicated on raising rates on every single Kansan who pays income tax,” he said via a press release.
“Her quote also tells another truth, which is that liberals view small businesses as ‘leverage’ so they can reach for where they feel the ‘bulk of the money is.'”
Rep. Randy Powell, an Olathe Republican, called campaign claims about the LLC-exemption being an issue of fairness a “smokescreen.”
“Even though the small business incentive is clearly working, the liberals needed to retain it as a political punching bag to beat up as they went about their real goal of hiking taxes on everyone to pay for their new spending,” Powell said.