Thursday, May 9, 2013

Kansas House, Senate far apart on tax issue as legislative wrap-up starts

By SCOTT ROTHSCHILD, The Lawrence Journal-World

A month-long break didn't bring Republican legislative leaders any closer to resolving their standoff over taxes as the wrap-up session started Wednesday.

Senate President Susan Wagle, R-Wichita, said she was sticking by the Senate-approved plan that would make permanent the 6.3 percent state sales tax rate, which under current law will decrease to 5.7 percent on July 1.

The higher rate is necessary, she said, to help balance the budget and provide enough revenue to start phasing out the state income tax. And that, she said, will lead to economic growth.

"Clearly, our position on tax issues is the opposite philosophy of the House," Wagle said.

The House plan would allow the sales tax rate to drop to 5.7 percent as scheduled. It would whittle down income tax rates more slowly than the Senate plan.

State Rep. Richard Carlson, R-St. Marys, and chairman of the House Taxation Committee, said the House made an informal offer to the Senate, but the Senate hasn't replied.

"We're willing to negotiate," Carlson said. He declined to provide any details of the offer.

Senate leaders, however, said the House position to allow the sales tax to drop would put the state in a big budget crunch next year, especially if the Kansas Supreme Court rules against the Legislature in the pending $500 million school finance lawsuit.

Wagle said many House Republicans may be afraid to vote to keep the sales tax rate up because they will face re-election in 2014. She urged Senate Republicans to reach out to House Republicans and promise to help them in their campaigns.

With no movement on taxes, work on the state budget has been in limbo. Before the break, the House had proposed a 4 percent cut to higher education, and the Senate a 2 percent cut.

The distance between Republicans, who hold significant majorities in both chambers, seemed to indicate the legislative session would go longer than 80 days, which was the target set by Wagle and House Speaker Ray Merrick, R-Stilwell.

Monday would be the 80th day, and leaders were considering taking off the weekend because of graduations and Mother's Day.

Merrick told freshmen in the House GOP caucus that the last days of a legislative session were always frustrating.

"It will eventually end, but it is agony to get there," he said.