Kan. Senate reverses course to approve tax cuts

Associated Press
Kansas state Sens. Ray Merrick, left, of Stilwell; Ty Masterson, center, of Andover, and Susan Wagle, right, of Wichita, all Republicans, confer during a debate, Wednesday, March 21, 2012, at the Statehouse in Topeka, Kan. All three support GOP Gov. Sam Brownback's push to lower income taxes to stimulate the economy. (AP Photo/John Hanna)
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TOPEKA, Kan. (AP) — The Republican-controlled Kansas Senate approved a bill Wednesday to cut sales and income taxes, reconsidering the legislation only two hours after rejecting it in an apparent snub to GOP Gov. Sam Brownback.

The bill, approved 29-11, is dramatically different to Brownback's original plan to overhaul and simplify the individual income tax code in hopes of stimulating the state's economy and creating jobs.

The Legislature's rules allow each chamber to reconsider an action within a business day, and the Senate's reversal was enough for Brownback to proclaim significant progress toward his goal.

"We are one step closer to hitting the accelerator on the emerging Kansas economy," Brownback said. "We must remain focused on the just cause of pro-growth tax reform — jobs and a brighter future for our children."

Senators embraced Brownback's proposals to cut the state's top individual income tax rates and eliminate income taxes for 191,000 partnerships, sole proprietorships and other businesses. But they rejected his proposals to eliminate income tax credits and deductions, including a credit for poor workers and deductions for charitable contributions and interest payments on home mortgages.

The Senate added a cut in the sales tax from 6.3 percent to 5.7 percent in July 2013. The action boosted the potential revenue loss to the state to an estimated $213 million during the fiscal year that begins July 1, growing to $829 million in the next year. In contrast, Brownback's plan is expected to lower state revenues about $90 million annually.

Democrats called the resulting legislation reckless, and Senate Minority Leader Anthony Hensley, a Topeka Democrat, said, "We should be ashamed of ourselves."

With the cost of the bill scaring some members, the Senate's first vote Wednesday was 20-20, leaving it one vote shy of passage. Two hours later, nine GOP senators, including Senate President Steve Morris of Hugoton and Majority Jay Emler of Lindsborg, switched their votes.

Morris said he and the other Republicans switched because they wanted to keep tax legislation moving.

Brownback spokeswoman Sherriene Jones-Sontag said the governor and his staff "spoke to a number of senators" between the two votes.

"Basically, most of the Republicans flipped out of respect for the governor," said Sen. Dick Kelsey, a Goddard Republican who switched his vote.

Senators also approved a property tax relief measure that was not proposed by the governor. It provides $180 million over the next four years to cities and counties and directs them to use the money to hold down their property tax levies.

The House has already approved a bill cutting income and sales taxes, as well as its own property tax relief measure. The final version of legislation cutting taxes probably will be drafted by negotiators for the two chambers, who plan to begin meeting Monday.

"Are we going to get everything the governor wanted? Probably not," said Senate Assessment and Taxation Committee Chairman Les Donovan, a Wichita Republican who supports the governor's plan. "It's going to be hard to put something together that works for everybody."

Brownback touted his tax overhaul as a way to make the individual income tax code simpler and fairer. He wanted to keep the sales tax at 6.3 percent so the state could afford to lower income taxes, arguing such cuts represent the best way to stimulate the economy.

The sales tax has become a sticking point for legislators in both parties because lawmakers increased it in 2010, before Brownback took office, to balance the budget. When they did, they promised it would drop to 5.7 percent in three years, and many legislators say keeping the commitment is important.

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Senate income and sales tax measure is Senate Sub for HB 2117. Senate property tax relief measure is Senate Sub for HB 2241.

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Kansas Legislature: http://www.kslegislature.org

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