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AP: Kansas GOP lawmakers huddle on taxes

5/17/2013

TOPEKA (AP) — Top Republicans in the Kansas Senate insisted Thursday that they're not far from a deal with their House counterparts on income tax cuts, but negotiations were temporarily on hold to focus on budget issues.

TOPEKA (AP) — Top Republicans in the Kansas Senate insisted Thursday that they're not far from a deal with their House counterparts on income tax cuts, but negotiations were temporarily on hold to focus on budget issues.

Republicans in both GOP-dominated chambers held a joint meeting to discuss fiscal issues a day after House Republicans outlined a new compromise tax plan that would reduce personal income taxes but stabilize the budget by canceling part of a sales tax decrease scheduled for July.

The major disagreement has been over Republican Gov. Sam Brownback's proposal to keep the sales tax at its current 6.3 percent rate while following up on massive personal income tax cuts enacted last year with additional rate reductions. The Senate approved Brownback's sales tax proposal, while the House initially approved a tax plan letting the sales tax drop to 5.7 percent as planned. The new House plan would set the sales tax at 6 percent.

Several Senate GOP leaders made a point of praising House Republicans for their work on budget and tax issues and extolled efforts to control spending and cut taxes. And, with the Legislature's annual session already stretching longer than originally planned, they emphasized they're eager to end it.

"We are almost there," said Senate Vice President Jeff King, an Independence Republican. "We've made a great deal of progress."

House Republicans offered their compromise plan during a meeting Wednesday of three senators and three House members assigned to reconcile the two chambers' differences. The negotiators hadn't met for more than a month as top GOP leaders tried and failed to privately broker a deal.

Brownback declined to comment on the new tax proposal.

"I'm watching," he told The Associated Press. "It's moving along."

Asked later about senators' comments during Thursday's hour-long meeting that a deal is close, House Speaker Ray Merrick, a Stilwell Republican, said, "Was there an offer in there someplace?"

As Republicans try to settle their differences, Democrats have been largely sidelined. Their leaders have said they aren't likely to vote for the compromise that emerges, anyway.

"I think they're really far apart and they're trying to put as good a spin on it as they can," Senate Minority Leader Anthony Hensley, a Topeka Democrat, said of GOP legislators.

Democrats see last year's income tax cuts as reckless, and without follow-up legislation this year, the state faces a projected budget shortfall of $230 million in July 2015. They also oppose the GOP's goal of shifting most of the burden of funding state government to the sales tax, because poor families tend to pay a higher percentage of incomes than wealthy ones.

GOP senators spent much of Thursday's meeting going over projections showing that the new House plan would not prevent the state from facing budget shortfalls through mid-2018.

But for decades, legislators have budgeted only year-to-year, and they've generally acknowledged that projections grow less reliable the further out they go.

"We've never gone out this far," said House Appropriations Committee Chairman Marc Rhoades, a Newton Republican.

Senate GOP leaders pressed arguments that Kansas will be more prosperous if it phases out personal income taxes — even without decreasing its sales tax. In proposing to keep the sales tax at 6.3 percent, they've pursued more aggressive income tax cuts than the House.

In addition, GOP Senate leaders said they first need an agreement with the House on a state budget of roughly $14.5 billion for the fiscal year beginning July 1 — a change in tactic. GOP leaders previously said lawmakers needed to settle tax issues first so budget writers knew how much money the state can spend.

"The more the variables we can determine in an exact manner right now, the better tax plan we'll have," said Senate President Susan Wagle, a Wichita Republican.

Republican legislators are feeling pressed for time because their leaders had promised to trim 10 days off the annual session's normal 90-day length in a show of efficiency. But Thursday was the 83rd day, and Wagle conceded that legislators are likely to meet next week.

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