Kansas Legislature passes big income tax hike

State Sen. Ty Masterson, R- Andover denounces a tax bill the Senate passed Friday, Feb. 17, 2017, in Topeka, Kan. (Thad Allton/The Topeka Capital-Journal via AP)
State Sen. Ty Masterson, R- Andover denounces a tax bill the Senate passed Friday, Feb. 17, 2017, in Topeka, Kan. (Thad Allton/The Topeka Capital-Journal via AP)

TOPEKA, Kan. (AP) — Kansas’ Republican-led Legislature voted Friday to roll back a deep tax cut championed by Republican Gov. Sam Brownback, conceding it helped put the state in dire financial straits and setting up a possible showdown with him.

Brownback has vowed not to sign the bill, which would impose income tax increases that would raise more than $1 billion over two years. The state Senate voted 22-18 for it Friday, a day after the state House approved it on a 76-48 vote.

Republican leaders were split on the measure, and neither the House speaker nor the Senate president voted on it.

“The right thing is to get out of this mess,” said Republican state Sen. John Doll, of Garden City, who backed the tax plan.

Neither chamber gave the bill the two-thirds majority it would need to override a veto. Brownback has strongly criticized the measure as harmful to working-class families and small businesses, but he has stopped short of saying he would veto it. He could let it become law without his signature.

The state faces projected budget shortfalls totaling nearly $1.1 billion through June 2019. Even with a big tax increase, lawmakers still would have to approve some stop-gap measures such as internal government borrowing to pay bills through June, until new revenue started flowing in.

Brownback and his allies continue to argue that the personal income tax cuts he championed in 2012 and 2013 are creating economic growth and the state’s problems were largely caused by slumps in agriculture and oil production. Voters rendered a different verdict last year, ousting two-dozen Brownback allies from the Legislature and giving Democrats and GOP moderates more power.

Legislators would be forced to start over on a new tax plan if Brownback vetoed the bill and they couldn’t override him, creating the possibility of a drawn out dispute.

Kansas is facing its third major tax increase to fill budget gaps in the five years since the first Brownback-inspired income taxes were enacted. In 2015, Republican lawmakers boosted sales and cigarette taxes in a package that critics labeled the largest tax increase in state history. The bill approved Friday calls for an even bigger tax hike to cover larger budget shortfalls.

Brownback has proposed raising tobacco taxes again, boosting liquor taxes and increasing annual filing fees for for-profit businesses, while preserving the core of his income tax cuts. He argues that Kansas should not abandon such policies when President Donald Trump and other Republican governors are pursuing income tax cuts that they say would create economic growth.

“I don’t know of another state in America that’s raising income tax rates — not another state, red or blue,” Brownback told small business owners this week.

The bill approved by lawmakers would raise the top income tax rate from 4.6 percent to 5.45 percent. It would restore a third tax bracket that Brownback successfully sought to eliminate and end an exemption for more than 330,000 farmers and business owners that he championed.

Brownback’s legislative allies argued that the state should cut spending first.

Even Senate Republican leaders who have been willing to increase income taxes outlined a plan last week to cut aid to public schools immediately by $128 million, or $279 per student, but they dropped the idea when support for it collapsed.

“The process is backwards, guys,” said Sen. Rob Olson, a conservative Olathe Republican who opposed the bill.

The tax bill had strong support from freshmen Republicans in both chamber and minority Democrats who said their constituents wanted them to find a permanent fix to the state’s budget problems and focused on Brownback’s policies as the problem.

“If we wouldn’t have touched our tax code (in 2012), financially, we wouldn’t be in this mess,” said Democratic state Sen. Tom Holland, of Baldwin City.


Get breaking news, weather and traffic on the go. Download our News App and our Weather App for your phone and tablet. Follow us on Facebook and Twitter.