Daily Archives: May 19, 2012

Brownback offers massive deal to end session; Senate rejects it

TOPEKA — Gov. Sam Brownback offered the Senate a massive deal that would give the Senate the education funding and budget proposals it wants in exchange for a batch of redistricting maps, education policy changes and a tax-cutting bill that is more modest than the one sitting on the governor’s desk.

“The governor thought it was a fair compromise on all the important issues before the legislature,” said Brownback’s spokeswoman Sherriene Jones-Sontag

Senate President Steve Morris declined the plan. He said the Senate isn’t comfortable with the tax-cutting proposal because it could tank the state’s budget within a few years. Morris said the courts will likely decide how Kansas political boundaries are redrawn because lawmakers can’t agree on a map.

Brownback’s proposal would provide $77 million in additional education funding, an amount the Senate supports. But in exchange Brownback requested the Senate adopt several policy changes.

The proposal also would have required the Senate to approve a negotiated tax-cutting plan that would reduce individual income tax rates to 3 percent on the first $30,000 of income for married couples and 4.9 percent on earnings beyond that. The plan would have also phased out taxes on nonwage income of thousands of businesses. The proposal also included money for property tax relief.

 

 

Senators pitched last-minute tax cut alternative; Brownback said to be uninterested

TOPEKA — A group of four moderate Republican senators proposed a new tax-cutting proposal that aims to give Gov. Sam Brownback an alternative to the deficit-producing tax bill awaiting his signature. But Senate leaders said Brownback was not interested.

Sens. Terrie Huntington, Jeff Longbine, Vicki Schmidt and Pete Brundgardt crafted the plan and brought it to Brownback, according to three senators.

Huntington confirmed the effort. But she said the Governor “was not interested.”

Senate President Steve Morris, R-Hugoton, said the proposal was slightly more aggressive than an alternative he and other Senate leaders proposed earlier this week. That plan was quickly rejected by House tax negotiators.

Morris said the proposal would have cut rates to 3.1 percent on married couples’ first $30,000 of income and 5.65 percent for income beyond that. It would have eliminated nonwage income tax on the first $100,000 of profits made by limited liability companies, subchapter S corporations and sole proprietorships.

“That was turned down,” Morris said.

Morris said he doesn’t expect any more efforts to produce an alternative to the bill awaiting Brownback’s signature. And he urged Brownback to veto the bill.

Brownback has already said he will sign the massive income tax reduction bill, which reduces rates for individuals and eliminates taxes on nonwage income for about thousands of businesses large and small. But Brownback continues to signal that he would prefer a compromise that phases the cuts in to ease the impact on the state’s budget.

Earlier this week, House negotiators quickly rejected three tax cut bills proposed by Senate leaders.

The plan awaiting Brownback’s signature would create deficits within a year of its implementation, and those projected deficits would grow into the hundreds of millions, forcing the state to drastically cut services unless the tax cuts produce an economic boom.

Brownback’s administration projects the tax cuts could create 23,000 new jobs on top of natural growth by 2020. But Democrats and moderate Republicans doubt those projections will be realized, and they say Kansans want property tax reduction more than income tax cuts.

The Senate balked at two other negotiated plans that would not produce deficits as large as the bill on Brownback’s desk. They’ve said that’s because even those cuts are projected to produce deficits according to analysis that does not include projected savings from the Governor’s Medicaid overhaul.

Check back for updates.

Brownback says negotiated tax plan would have been better

Brownback after rallying House Republicans this morningTOPEKA — Gov. Sam Brownback advocated for weeks for the House and Senate to approve a phased-in set of income tax cuts, but instead he got a package that drops rates for individuals immediately and eliminates the tax on nonwage income for thousands of businesses.

Today, he rallied House Republicans and later said that he thought the negotiated plan was “a better path overall.”

But he held out little hope that a new plan will emerge, despite ongoing deal-making going on in the Capitol today.

“We’re at the end. We’re past the time the session ought to be wrapped up,” said Brownback, dressed in blue jeans and button-up shirt for what many expect to be a marathon session today. “It needs to wrap up today, so let’s move on forward.”

Brownback said it’s too early to tell how much — if any — lawmakers will have to cut the budget next year as a result of the tax plan, which state analysts project will cause hundreds of millions in cuts year after year.

“I think we’re going to be in good shape,” he said, noting better than expected growth this year.

But that’s the opposite of what moderate Republicans and Democrats predict.

“We are not in the business of bankrupting the state of Kansas,” said Senate Minority Leader Anthony Hensley, D-Topeka. “And if he signs that bill, that is a fiscal Armageddon.”

House Minority Leader Rep. Paul Davis, D-Lawrence, said the state probably shouldn’t increase education funding and other services this year since it would just be quickly cut next year if Brownback signs the tax bill.

“There’s just simply no way we can grow our way out of the deficits this tax plan will cause,” he said.