House still deadlocked on raising budget funds

ORIGINALLY WRITTEN JIM O’MALLEY
Sixty-three House members-a majority-voted to increase taxes Friday. But the votes were divided between two separate bills, and Saturday the House remained deadlocked on how-or whether-to raise enough revenue to pay for the budget it passed last week.

The Senate passed a $300 million tax package the previous week that would fund the budget with sales, cigarette, alcohol and inheritance taxes.

But the House remains divided among Democrats, moderate Republicans and conservative Republicans over taxes, even after Gov. Bill Graves announced he would be using his authority to cut state spending by $300,000 if the Legislature didn’t raise the revenue required for its budget.

Tax increase rejected

Friday, the House first rejected an income-tax increase proposal introduced by Rep. Bob Bethell, R-Alden, that would have raised rates on income over $60,000 for married couples filing jointly and over $30,000 for individuals. But the proposal wasn’t a serious one-it only received eight votes, none of them from Republicans.

The rates now max out at 6.45 percent for income over $60,000 for joint returns and over $30,000 for individuals.

Democrats want any tax package to include an increase in the income-tax rates on high incomes and supported a proposal introduced by Rep. Bill Reardon, D-Kansas City.

It would have created two new income-tax brackets: for married people filing joint returns the rates would be 7 percent on income more than $110,000 and 7.5 percent on income more than $240,000.

For individuals, those rates would apply at $55,000 and $120,000. The measure would have raised about $58 million in the next fiscal year.

The measure failed 88-34. No Republicans voted for the proposal.

Reardon said the state’s budget crisis left lawmakers in a difficult situation.

“The worst of all possible worlds is to risk political capital with a tax increase that only maintains the status quo,” he said. “And this doesn’t even maintain the status quo.”

Democrats said the Republicans’ reliance on increases in sales, cigarette, and alcohol taxes were unbalanced and unfair.

Rep. Bruce Larkin, D-Baileyville, said everyone knew a tax increase was necessary to fund the budget. The question was who would pay it.

Larkin said low-income Kansans were paying the highest percentage of their incomes in taxes and people with the highest incomes were paying the lowest percentage in taxes.

A family of four making $30,000 spends every dollar they get and pays sales tax on every dollar they spend, he said, and Republican tax proposals that relied largely on sales taxes would balance the budget on the backs of the people least able to afford it.

House Taxation Committee Chairman John Edmonds, R-Great Bend, said there was no more economically destructive tax than the income tax.

“It constitutes a tax on productivity,” he said. “It constitutes a tax on success.”

Rep. Doug Mays, R-Topeka, told Republican members, who might be tempted to vote for the proposal because it gets them home, that surveys showed the only tax more hated than the income tax was the property tax.

“You can explain and explain and explain, but there’s an old political saying, ‘If you’re explaining, you’re losing,'” he said.

Mays predicted that voters would react by saying, “You raised income taxes and you’re toast.”

Other tax increases rejected

Friday night the House also rejected a Republican proposal to raise sales and cigarette taxes and to restore the inheritance tax on property inherited by anyone other than lineal descendants or siblings. It got only 29 votes, all of them from Republicans.

Saturday the House rejected 120-0 the fuel tax and vehicle-registration fee increases passed by the Senate last week. Rep. Bob Grant, D-Cherokee, told members they should defeat the measure to show that the House wasn’t going to take the Senate’s arrogance.

“Continued pathetic inaction.”

That’s how House Speaker Kent Glasscock, R-Manhattan, described the House’s lack of progress Friday, shortly after the governor announced that he would have to cut $300 million from the budget if the Legislature didn’t come up with the revenue.

The governor’s announcement wasn’t a scare tactic, Glasscock said.

“This is not a drill,” he said. “This is a red alert. This is for real. We’re running out of time.”

He said he hoped there weren’t enough legislators who’d be fine with letting the governor cut $300 million from the budget.

Glasscock said that without the taxes “everything else is an empty promise.”

He said he wouldn’t oppose a revenue package that included an income-tax increase.

“I’m willing to bring any reasonable package to the floor for a vote,” he said. “I will continue to search for 63 brave souls who are willing to vote for revenue.”

One legislator who would be fine with letting the governor cut the budget is Sen. Ed Pugh, R-Wamego, a staunch opponent of tax increases and government spending. He said it was one way to shrink state government, though it would be ironic to force the governor to make the cuts that conservatives have long wanted.

But House Democrat Bruce Larkin said he thought the votes were there for the right tax package-one that wasn’t entirely regressive.

“But I’m not seeing negotiations going on,” he said. “I’m the ranking minority member of the Taxation Committee and nobody’s talking to me yet. As big a problem as we have, the negotiations should have started back in February.

“If the Republicans want to pass a completely regressive tax package, they should pass it. If they can’t, they’ve got to compromise. They’re the party in power. They’ve got to bite the bullet.”

Larkin said part of the problem was the animosity generated by the fight over legislative redistricting.

Senate home, House stays

The Senate was technically in session Friday, but Senate leaders told senators they didn’t have to attend unless they were called back. Having passed its budget and a tax package to pay for it, the Senate is waiting for House action on taxes.

Saturday a conference committee came up with a modified sales, cigarette and alcohol tax package for the House to consider. The package equalizes the percentage increases in the taxes on different kinds of alcohol and includes a 65-cent-per-pack cigarette tax-increase.

John Edmonds said lowering the cigarette-tax increase from 76 cents to 65 cents would gain another three Republican votes.

But Sen. Dave Corbin, R-Towanda, observed, “Three doesn’t get us to the magic number.”

Edmonds agreed. He said he expected the package to fail.

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