Kansas Senate cancels debate on raising taxes before lawmakers break for long holiday weekend


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TOPEKA, Kansas — Top Republicans in the GOP-dominated Kansas Senate canceled their first scheduled debate Thursday on raising taxes to erase a projected budget shortfall, just before lawmakers scuttled out of the Statehouse for an extended holiday weekend.

The Senate's inaction meant that neither chamber approved a plan by the 95th day of the Legislature's annual session, five more than its leaders traditionally schedule. Lawmakers suspended their own pay until they reconvene after Memorial Day.

"I'd love to get this over with," said Senate tax committee chairman Les Donovan, a Wichita Republican. "Until we get agreement with enough people to pass something, we won't get out of here."

Each chamber's Republican supermajorities are deeply divided over how to deal with a projected shortfall of $406 million for the fiscal year beginning July 1. It arose after lawmakers followed GOP Gov. Sam Brownback's call to cut personal income taxes in 2012 and 2013 as an economic stimulus.

The key issues are how much to increase the state's 6.15 percent sales tax and whether to backtrack on a 2012 policy championed by Brownback that exempted the profits of 281,000 business owners and 53,000 farmers from income taxes.

The Senate was supposed to debate a bill to increase sales, cigarette and gasoline taxes. The measure also would have suspended the tax break for business owners and farmers for two years, replacing it with a less lucrative tax credit against businesses' payrolls.

"How do we know where people will be if we don't have a discussion about it?" said Senate Minority Leader Anthony Hensley, a Topeka Democrat. "The reason there's no light at the end of the tunnel is because they can't even find the entrance to the tunnel."

President Susan Wagle, Majority Leader Terry Bruce and tax committee chairman Les Donovan left a morning meeting of Republican senators believing the bill would not pass, even if it was rewritten. They planned to go ahead with the debate anyway to get clues about where compromise might be possible.

But GOP leaders called the debate off shortly before it was to begin. Bruce told reporters that proposed amendments meant to test support in the Senate for various proposals weren't ready.

Bruce, from Nickerson, said the long weekend would give lawmakers a chance to talk to their constituents.

"Once legislators return, I think they do have a fire lit under them to get something done," Bruce said.

The tax cuts in 2012 and 2013 included not only the exemption for business owners and farmers, but also a reduction in personal income tax rates. The top rate dropped by 29 percent.

The state Department of Revenue estimates that the exemption for business owners and farmers is worth about $220 million a year, or about 22 percent of the total income tax cuts for the next fiscal year. Influential groups such as the Kansas Chamber of Commerce and the National Federation of Independent Business are lobbying to keep it.

But if lawmakers do, they'll have to rely more heavily on increasing the sales tax to close the budget shortfall.

The Senate plan would have increased the sales tax to 6.5 percent, while dropping the rate on food to 6 percent.

It also would have raised $82 million during the next fiscal year by replacing the business profits exemption with an income tax credit equal to 1 percent of a business' total payroll for this year and 2 percent for 2016.

Each extra day in session costs the state about $43,000, mostly because each lawmaker receives $218 in salary and expense payments. Legislative researchers say 12 of the previous 40 annual sessions lasted longer than 95 days, and the longest in state history was 2002, at 107 days.

But Brownback spokeswoman Eileen Hawley said in an email statement: "It is more important to get it done right for the people of Kansas than to get it done quickly."


Senate tax plan: http://bit.ly/1c5Wxty

Follow John Hanna on Twitter at https://twitter.com/apjdhanna .

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