Senate flips position and approves altered Brownback tax plan

TOPEKA — Nine senators changed their vote on a modified version of Gov. Sam Brownback’s income tax cut plan this morning and helped pass the bill in a 29-11 vote.

Sen. Carolyn McGinn, R-Sedgwick, said she was told by senate leadership that the Governor’s office had applied a lot of pressure to get them to reconsider the bill.

McGinn was among those who voted against the bill earlier this morning in a 20-20 vote that killed it. But she and eight others changed their vote when the senate abruptly reconsidered the bill. (Others included Sens. Brungardt, Emler, Huntington, Kelsey, Longbine, Morris, Teichman and Umbarger.)

McGinn said she decided that she wanted a bill to bring to a conference committee where select members of the House and Senate negotiate the differences between proposals that have passed one of their houses.

Senate President Steve Morris declined to comment about whether the Governor’s office was involved in the discussions that led to the re-vote.

“There was a lot of interest in making sure we had something to go to conference,” he said.

Morris said the elimination of nonwage income tax for most businesses is in both Senate and House bills and “might” be a component that could pass both houses.

Morris said the House will have the option to agree with the Senate plan and forward it to the Governor’s desk. But, he said: “That won’t happen.”

Instead, Morris expects the House and Senate will appoint conference committees and negotiate a bill both bodies can accept.

Wichita Republican Sen. Les Donovan said he wasn’t sure what changed. But, like others, he said lawmakers probably wanted to have an income tax bill to negotiate with the House.

“Are we going to get everything the Governor wanted?” he asked. “Probably not.”

Senate Minority Leader Anthony Hensley, D-Topeka, issued this statement about the change of hearts: “I’m appalled that Governor Brownback resorted to backdoor arm twisting to get his tax plan through the Senate this morning.”

Brownback released the following statement:  ”The Senate took an important step towards growing the Kansas economy and creating new jobs.  We are one step closer to hitting the accelerator on the emerging Kansas economy.  We must remain focused on the just cause of pro-growth tax reform – jobs and a brighter future for our children.”

Brownback’s plan initially eliminated dozens of state tax credits and deductions and continued indefinitely a penny sales tax that many lawmakers had promised to let expire in July 2013. Those moves would have helped financed reductions to individual income tax and the elimination of nonwage income tax for limited liability companies, sub-chapter S corporations and sole proprietorships. It left the corporate tax rate as is.

Brownback’s plan then would have capped the growth of state spending at 2 percent and used anything beyond that to dial down income tax rates as long as the state could boast an ending balance of 7.5 percent.

But a senate panel voted to remove the 2 percent cap, effectively forcing the legislature to take action if they wanted to reduce individual income tax rates beyond the modest first-year reductions in Brownback’s plan. The panel also voted to keep the earned income tax credit that benefits the working poor in place — instead of deleting it as proposed by the Governor.

When the plan hit the Senate floor Tuesday, McGinn offered an amendment to let 6/10ths of the penny sales tax expire as she and many others had promised. And Sen. Vicki Schmidt offered an amendment to save all the credits and deductions that would have been axed under Brownback’s plan, including the popular home mortgage deduction.

Those moves made the plan far more expensive — from the $105 million estimated price tag as it left the senate committee to, as one official put it, about $800 million.