Saturday, May 25, 2013

House rejects Senate-approved tax package; Legislature adjourns; new plan teed up

By SCOTT ROTHSCHILD, The Lawrence Journal-World

Republicans leaders on Friday adjourned the Legislature for the long holiday weekend after being unable to reach a consensus on taxes and the budget.

Later on Friday, Senate conferees accepted a new House offer in the tax conference committee, but the Senate majority leader said the plan was unlikely to pass the full Senate.

Democrats, who have been relegated to the sidelines, said the overtime session was going downhill fast. House Minority Leader Paul Davis, D-Lawrence, said the Legislature was in “meltdown” mode.

On Thursday, the Senate, with only Republican support, approved a five -year, $824 million tax increase that increased the state sales tax, eliminated deductions, but cut income tax rates. Gov. Sam Brownback, who has championed income tax cuts as the way to spur the economy, supported the measure.

But early Friday, the House, in a bipartisan fury, swatted it down 109-5 and then adjourned until Tuesday.

The move prompted criticism from Senate leaders.

“The Legislature doesn’t deserve to go home for the weekend,” Senate Majority Leader Terry Bruce, R-Hutchinson, said. Senate President Susan Wagle, R-Wichita, had urged legislators to work through the weekend.

But House Speaker Ray Merrick, R-Stilwell, criticized Senate leaders, saying they were playing politics instead of trying to work out compromises.

“This is an agonizing process,” he told his caucus.

More sales tax, but break on groceries

The Senate package would have made permanent the 6.3 percent state sales tax, which under current law is set to decrease to 5.7 percent on July 1.

The measure would also lower the sales tax on groceries to 4.95 percent. Over five years, it would also phase out popular itemized deductions and decrease standard deductions. But it would also lower state income tax rates from the top rate of 4.9 percent to 3.5 percent, and the bottom rate from 3 percent to 2.5 percent.

House GOP leaders oppose extending the full 6.3 percent sales tax, and have different proposals on lowering income taxes.

Bruce said the reason for much of the impasse over passing a tax package was that the House had so many freshman legislators who faced a steep learning curve. He said most of them have spent half the session trying to figure out where the bathrooms are.

New plan emerges

As rank-and-file legislators started hitting the exits, leaders had the House-Senate tax conference committee continue meeting. Senate conferees accepted a House offer that will tee-up votes either Tuesday or Wednesday on setting the sales tax at 6 percent, eliminating 50 percent of deductions, and lowering the top income tax rate over 5 years from 4.9 percent to 3.5 percent, and the bottom rate from 3 percent to 2.3 percent. That plan would increase tax revenue by $857 million over 5 years.

House Tax Chair Richard Carlson, R-St. Marys, said he believed the new plan would pass the House, but Senate Majority Leader Bruce said he didn’t think it had much chance in the Senate.

Prison system decries budget cuts

But other fires started erupting — namely the budget that had been agreed to earlier in the week by Republican budget negotiators.

Kansas Secretary of Corrections Ray Roberts informed legislators that the budget agreement contained cuts to the corrections system that would put Kansans at risk.

The proposed $12.5 million hit would force the closure of the Stockton Correctional Facility, which houses about 130 inmates, and leave unsupervised low- and medium-risk offenders, including sex offenders, who are on parole.

And there would be cuts in programs for mental illness and substance abuse, he said.

“The end result is that we will be spending far more than we save with the potential for increased victimization of Kansans due to an increased rate of untreated, unsupervised offenders in our communities,” Roberts said.

News of the cuts to the corrections system came as criticism mounted over the proposed state budget that was crafted by the chief Republican budget writers in the House and Senate.

State Rep. Marc Rhoades, R-Newton, put $87,000 in the budget to promote two Wichita-area golf tournaments. And the budget bill would also designate $50,000 to allow Rhoades and the chief Senate budget writer, state Sen. Ty Masterson, R-Andover, to each employ a staff aide throughout the year. Rhoades’ current chief of staff is the wife of former House Speaker Mike O’Neal, who is now president of the Kansas Chamber of Commerce.

Minority Leader Davis said those proposed expenses were outrageous.

“This is money we are just throwing away, and we are doing this at the same time that we are going to leave sex offenders unsupervised,” Davis said.

Rhoades said the grants for the golf tournaments would help bring in millions of dollars in economic benefit, and the increased staffing would help coordinate work after the session is over.

Sloan unhappy with direction

The proposed budget also contains a 3 percent cut to universities over two years.

State Rep. Tom Sloan, R-Lawrence, one of the few moderate Republicans left in the Legislature, disapproved of the budget and tax plans pushed by conservative Republicans.

“I’m disappointed that the budget discussions continue to ignore some of the core issues for our state, and funding for education at all levels, and public safety,” Sloan said.

“The fairest and safest tax relies on a balance of sales, income and property taxes. Over-relying on sales and property is unrealistic in terms of protecting funding or essential state services,” he said.

Friday was the 91st day of the session. Earlier this year, GOP leaders said they wanted to end the session after 80 days. The Kansas Constitution specifies a 90-day session, but it allows legislators to meet longer.