Saturday, May 18, 2013

Legislative negotiations break down amid Republican in-fighting

By SCOTT ROTHSCHILD, The Lawrence Journal-World

Budget and tax negotiations broke down in the Legislature on Friday, prompting another round of Republican in-fighting before legislators went home, guaranteeing that the wrap-up session would extend into another week.

Senate Majority Leader Terry Bruce, R-Hutchinson, referred to the Senate as "go to chamber" and more conservative than the House.

In the House GOP caucus, legislators said they were feeling pressured by their Senate colleagues and frustrated.

House Tax Chairman Richard Carlson, R-St. Marys, said, "We don't have an A team and a B team. We have a Senate and a House. They are co-equals," he said.

The dispute among Republicans, who hold huge majorities in the Legislature, is over the budget and tax policy.

The state sales tax is scheduled to decrease from 6.3 percent to 5.7 percent on July 1.

But Gov. Sam Brownback and the Senate want to keep the rate at 6.3 percent, saying that is needed to help balance the budget while phasing out the state income tax.

But House Republicans want to let the sales tax rate drop and cut the budget beyond what Brownback and the Senate have endorsed.

Under a compromise offered earlier this week, House Republican leaders proposed keeping the sales tax rate at 6 percent, but the Senate and Brownback have said that's not enough.

Senate GOP leaders said Brownback would veto anything less than a 6.2 percent sales tax rate. The governor's office would only say that Brownback wants a budget and tax plan "that works."

A House-Senate budget conference committee meeting that was scheduled for Friday morning was canceled.

The chief Senate budget negotiator, Ty Masterson, R-Andover, said he asked the House's chief budget negotiator, Marc Rhoades, R-Newton, for a budget plan that would win a majority in the House. Rhoades said he couldn't immediately produce that. The two agreed to meet again Monday.

The major item of contention on the budget is higher education funding. The House has proposed a 4 percent across-the-board cut for each of the next two years, while the Senate countered with a 1 percent cut in each of the next two years.

In addition to the proposed across-the-board cuts, the House plan diverts millions of dollars in lapsed funds from universities. The total cuts to universities would be $42.1 million, or 7.4 percent, according to figures provided by the Kansas Board of Regents.

Kansas University and the KU Medical Center would take a combined hit of nearly $20 million.

Brownback has opposed cuts to higher education.

State Sen. Laura Kelly, the ranking Democrat on the Senate budget committee, said Republicans are in a bind of their own making because of the tax cuts signed into law by Brownback last year. "The numbers don't work. We are in a world of hurt," she said.

Last year, Brownback pushed through cuts in income tax rates and the elimination of state income taxes for 190,000 businesses. The package also did away with tax credits used by hundreds of thousands of low-income Kansans.

But Republicans continued to vehemently defend keeping the sales tax high while lowering income taxes. Senate President Susan Wagle, R-Wichita, said that would grow the economy and provide more jobs.