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Kansas House Approves Tax Increase, Sends Bill to the Senate

The Kansas House during a meeting Thursday. (Photo by Stephen Koranda)

UPDATE - the Senate has now approved the bill, sending it to Governor Sam Brownback for consideration.

The Kansas House approved a bill Thursday that would be a major change of course on tax policy. It would undo many of the state's 2012 tax cuts to help balance the budget. The 76-48 vote sends the plan to the Senate for consideration.

While the bill had significantly more than the 63 votes needed for passage, it had received 83 votes during a preliminary test Wednesday. It would need 84 votes to override a possible veto from Governor Sam Brownback.

The measure raises income tax rates, adds a third income tax bracket and reinstates income taxes on hundreds of thousands of business owners. It would raise taxes over $1 billion in the coming years.

The chairman of the House tax committee, Republican Steven Johnson, says they have to balance tax cuts and funding government services.
 
“It’s a return of some, not yet all, but some of the tax cut that we had," says Johnson. "I think we were directionally correct to lower tax rates in 2012. I do think we went farther than we could afford to go at that time."
 
Johnson says the bill is a starting point and could be amended as the process goes forward.

Kansas lawmakers have struggled to balance the budget since cutting taxes in 2012. They're currently looking for ways to erase budget deficits that total more than $1 billion by the middle of 2019.

The House tax bill garnered votes from Republicans and Democrats, including Democrat John Carmichael, who says they need to take steps to get the state's finances on solid ground.

“In the House of Representatives there is a strong bipartisan coalition and commitment to try to fix this problem, and I’m willing to put my name on the line and vote yes even though it does represent an increase in taxes,” says Carmichael

Republican Trevor Jacobs says reinstating income taxes on business owners is bad economic policy.
 
“How can the state ask for prosperity when it cuts the vital roots of growth? The problem is not that people are taxed too little, the problem is that government spends too much,” says Jacobs.
 
Governor Brownback has strongly defended the tax cuts, saying they grow business. He said Wednesday that he would not sign the House tax plan into law if it made it to his desk.

“I am opposed to broad-based rate increases on income taxes. I won’t sign that,” says Brownback. “It’s going against the trend of everywhere in the country, if not in the world.”

The Kansas Senate could debate the proposal this week.

The tax increase would not help with a budget shortfall in the fiscal year that ends in June. House lawmakers gave first-round approval Thursday to a bill that would dissolve a state investment fund to help fill that budget hole.

The Kansas Senate also had its first tax debate of the year Thursday. They considered a bill pushed by Democrats in the chamber. It would have raised more revenue than the legislation approved by House lawmakers.

The Senate roundly rejected the bill on a 10-30 vote. Democratic Senator Tom Holland says while the bill failed, it marked the start of a process.

“We’ve got to find a combination of revenue increases and cuts to get us out of this, and it’s going to take a couple cycles of going through this until we find that sweet spot,” says Holland.

Stephen Koranda has more on the House vote:


 

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