Tuesday, January 22, 2013

Brownback budget has Democrats, moderate Republicans facing dilemma

By SCOTT ROTHSCHILD, The Lawrence Journal-World

Gov. Sam Brownback, a conservative Republican, may have Democrats and moderate Republicans between a rock and a hard place.

Here is the situation.

The income tax cuts Brownback signed into law last year are draining the state treasury. Kansas will collect $5.5 billion in the fiscal year that starts July 1, which is approximately $700 million less than current spending.

But Brownback has doubled down this year, calling for more tax cuts with the eventual phase-out of the state income tax.

In order to do this and balance the budget, Brownback has proposed three major actions: making permanent what was supposed to be a temporary sales tax increase, eliminating the home mortgage interest deduction and transferring $245 million from the state highway fund to public schools.

"This budget is being held together by duct tape and dental floss," said House Minority Leader Paul Davis, D-Lawrence.

"It's all premised on keeping this irresponsible income tax (cut) in place," said Senate Minority Leader Anthony Hensley, D-Topeka.

"If the governor is not able to get some of the things that he wants here, I think he faces some real problems with being able to balance the budget," Davis said.

But conservatives, who now make up majorities in the House and Senate, have been grumbling that they want to cut the budget.

If moderate Republicans and Democrats don't try to do the heavy lifting for Brownback, they may see school funding and other areas of government that they support get whacked.

"I'm concerned about a lot of things that Democrats care about, but understand that there is one reason that we're in this situation and that is this massive tax plan that the state simply can't afford that has put us in a terrible fiscal situation," Davis said.

The tax cuts Brownback approved last year reduced state income tax rates and eliminated income taxes for 191,000 business owners.

In 2010, before Brownback was governor, the Legislature approved a one-cent increase in the state sales tax to avoid further cuts to services during the Great Recession.

Six-tenths of a cent of the increase is scheduled to go away July 1, but Brownback wants to keep it in place in order to lower the highest income tax bracket from 4.9 percent to 3.5 percent and drop the lowest rate from 3 percent to 1.9 percent.

Hensley said if Brownback's budget-balancing proposals don't pass, "we'll have to see what the consequences are. I'm not willing to talk about hypotheticals."

But, he said, he will not vote to extend the sales tax, noting that when the increase was approved, legislators promised that it would fall back in 2013. "I'm not going back on my word," Hensley said.