AP: Kansas Senate panel debate on taxes seen as 'fluid'

2/5/2013

TOPEKA (AP) — The Kansas Senate majority leader predicted Monday that most of Republican Gov. Sam Brownback's tax plan would emerge from committee, but the panel's chairman said the climate surrounding the legislation is "fluid."

TOPEKA (AP) — The Kansas Senate majority leader predicted Monday that most of Republican Gov. Sam Brownback's tax plan would emerge from committee, but the panel's chairman said the climate surrounding the legislation is "fluid."

The Republican-dominated Assessment and Taxation Committee planned to begin debating Brownback's proposals Tuesday.

Going into the discussions, four of the committee's nine GOP members, including Senate Majority Leader Terry Bruce, told The Associated Press that they're inclined to support parts or most of the governor's plan. Another four said they're still studying the governor's ideas or will wait to see how the panel's discussions unfold. Chairman Les Donovan, a conservative Wichita Republican, backs the governor's plan but said he'll let committee members present their own ideas.

Brownback has said his goal is to phase out the state's individual income taxes, and he's proposing a further round of reductions in rates to follow up on aggressive cuts enacted last year. But he's also trying to keep the budget picture stable by eliminating two popular income tax deductions for homeowners and canceling a drop in the sales tax scheduled by law for July.

Senate Majority Leader Terry Bruce, a conservative Hutchinson Republican who serves on the tax committee, said he's comfortable with the direction of the governor's proposals, though he said senators on the panel may make relatively minor changes. He acknowledged that senators are privately discussing alternatives to some of the proposals.

"They'll start gravitating toward the governor's overall plan," Bruce said. "If not, we're going to get lost in the weeds."

Republicans have a 9-2 advantage on the committee, reflecting their supermajority in the Senate. The panel's Democrats, Senate Minority Leader Anthony Hensley of Topeka and Sen. Tom Holland of Baldwin City, won't support any of the governor's initiatives.

Hensley and Holland viewed last year's tax cuts as reckless and argued that the reductions would lead to continual budget shortfalls. With last year's reductions, the state faces a projected $267 million gap between anticipated revenues and existing spending commitments for the fiscal year that begins in July.

The governor's plan would eliminate the shortfall for the next fiscal year, though critics believe pursuing further cuts would cause another shortfall to emerge in 2018.

"The governor made the sandwich. He can eat it," said Holland, who ran unsuccessfully against Brownback for governor in 2010. "I'm not going to put mayonnaise on it to help someone else choke it down."

Brownback's plan would eliminate income tax deductions for the property taxes Kansans pay on their homes and the interest they pay on their mortgages. More than 300,000 of the state's 1.4 million income tax filers claim each deduction.

The plan also would keep the sales tax at its current rate of 6.3 percent, rather than letting it drop to 5.7 percent in July, as called for by budget-balancing legislation enacted three years ago, before Brownback was elected governor.

Donovan said he expects the committee's discussions to occur over several days, adding "it's fluid."

Freshmen Sens. Larry Powell of Garden City and Jeff Melcher of Leawood, both conservative Republicans, said they're supporting those proposals from Brownback because they'll stabilize the budget and because the governor's ultimate goal is to phase out income taxes. Both said — as the administration has argued — that the two income tax deductions won't matter when the tax itself is phased out.

"We've got to do what's right to make the budget work," Powell said.

Sen. Julia Lynn, a conservative Olathe Republican, said she's backing the sales tax and mortgage interest deductions for the same reasons but wants to further examine the proposal to eliminate the property tax deduction. She said lawmakers also ought to consider other income tax deductions and credits, as well as exemptions to the sales tax.

Conservative Republican Sens. Mike Petersen of Wichita, Mary Pilcher-Cook of Shawnee and Caryn Tyson of Parker said they're still studying tax issues and waiting for the debate.

Sen. Pat Apple, a conservative Louisburg Republican, said he expects the committee to endorse a plan similar to the governor's. He stopped short of committing to Brownback's proposals, saying he wanted to see what, if any, alternatives the committee considers, but added that this year's bill must "smooth out some of the rough spots" from last year's legislation.

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