TOPEKA — The Senate relied on a parliamentary maneuver Tuesday to crush Gov. Sam Brownback’s plan to raise $200 million annually by retreating from an income tax rate cut for lower-income Kansans, taxing rent and royalty income, and raising cigarette and liquor taxes, as well as business filing fees.
Two hours into debate on the bill, which featured allegations of political gamesmanship, the chamber voted 37-1 for a motion to strike the bill’s implementation clause. Senators were crawling through individual provisions of the bill at the request of Sen. Gene Suellentrop, R-Wichita, when a surge in bipartisanship led to calls for an end to the chalkboard scratching and the motion killing a bill certain to fail.
“I’d like to end this colossal waste of time. It’s games,” said Sen. Ty Masterson, an Andover Republican. “All these votes are meaningless, null and void.”
When the vote was tallied, Suellentrop stood alone as the only person inclined to continue exploring pieces of Brownback’s recommendations.
“The reason why we’re here is the governor’s failed tax policy of 2012,” said Sen. Tom Holland, D-Baldwin City. “I do believe there is a better solution out there.”
Brownback and the 2017 Legislature have waged a two-month battle on how to reduce spending or escalate revenue to close projected budget deficits in the current and upcoming fiscal years. The immediate challenge is the shortfall of about $300 million in the existing state budget that could soon result in severe cash-flow problems for government operations.
The governor vetoed a more aggressive tax-hike plan adopted by the House and Senate, but the Republican-led Senate came three votes short of joining the House in an override.
Senate President Susan Wagle, R-Wichita, accused the governor of “playing games” by not accepting the gravity of the state’s budget problem.
“After the Legislature presented and Gov. Brownback vetoed House Bill 2178 last month, the governor explicitly requested a ‘full and fair airing’ of his tax plan,” Wagle said. “While I do not believe his proposal fixes our state’s current budget deficit, I do think the governor deserved a certain level of deference and a real debate on his tax proposal.”
Senate Minority Leader Anthony Hensley, D-Topeka, had a different take on debate of the governor’s tax bill. He said action on Brownback’s bill was an exercise in futility and demonstrated neither Wagle nor Senate Majority Leader Jim Denning, of Overland Park, had a veto-proof plan of their own.
“I call upon the president and majority leader to stop making the governor relevant and to start working with senators in both caucuses to pass a tax plan with 27 votes,” Hensley said.
In an interview, Brownback said the Senate ought to place priority on adopting the budget revision bill approved by the House. State lawmakers also should answer the Kansas Supreme Court ruling that state aid to K-12 public schools to be unconstitutionally inadequate, he said.
“I put forward proposals. I put forward a budget. The budget structurally balances in ’19. It takes us that period of time to get out from under the commodity recession. And we do it without cutting K-12, which I think is important,” Brownback said.
Under Brownback’s tax plan in Senate Bill 175, the state’s tax on liquor would double to 16 percent, and the state’s tax on cigarettes would be increased from $1.29 per pack to $2.29 on July 1. The changes to tobacco and liquor taxation would generate about $110 million each year for the state government.
Brownback responded to anxiety about a state income tax exemption held by owners of 330,000 businesses by recommending a $33 million tax on so-called passive income from rents and royalties. His bill would raise the annual filing fee for for-profit businesses from $40 to $200 starting July 1.
The bill advocated by Brownback would abandon an income tax rate reduction due to occur in tax year 2018 for those in the bottom of the state’s two income tax brackets. The rate was to have been reduced from the current 2.7 percent to 2.6 percent. Repeal of that measure would cost those taxpayers $4.8 million next fiscal year and $16 million in the subsequent fiscal year.
Sen. Jeff Longbine, an Emporia Republican and the chamber’s vice president, said the Legislature needed to press ahead with review of alternatives as the clock continued to tick on the session.
“We need to start either exploring options that are passable or removing options that aren’t,” he said. “We’ve got a number of tax proposals and ways we can go. You either find consensus on one of them, which we don’t have, or you start eliminating options.”