Lawmakers in the Kansas House rejected a bill Monday that would have rolled back much of the state’s 2012 tax cuts. The vote came on the fifth anniversary of the tax cuts being signed into law.
The plan would have reinstated income taxes for more than 300,000 business owners and increased income tax rates. It would have raised $1.2 billion over the next two years to eliminate a state budget shortfall approaching $900 million.
The bill split both parties and failed on a 53-68 vote, 10 votes shy of passage.
Republican Representative Russ Jennings supported the plan because he said the tax cuts had hurt the state’s finances and ability to fund core services.
“It is not perfect. You can find a reason not to vote for it, but the time’s come to change the course,” said Jennings.
Some Democrats didn't support the bill because they believe it wouldn’t allow lawmakers to add enough funding for Kansas schools. Some want to finalize a K-12 funding plan before working on taxes. The state Supreme Court has ruled the state’s education system is not adequately funded.
Republican Representative Ron Highland was concerned the bill raised taxes too much and could drive people in the Kansas City area across the state line.
“Now do we really want to work on a system that is going to harm that sector along the Missouri border? We need to think about this when we’re talking about a big tax plan,” said Highland.
Meanwhile, a group of conservative Kansas lawmakers has introduced a new plan to balance the state budget. The proposal would eliminate any new spending, sell off part of an annual tobacco settlement payment and assume a higher growth rate for state revenues.
Republican Representative Chuck Weber said with this plan they could balance the state budget with no tax increase.
“The conversation since day one has been ‘raise taxes, let’s spend more.’ What we’re saying here, collectively, is there’s another way. We can do this a different way,” said Weber.
The top Democrat in the House, Jim Ward, said lawmakers have made efforts to control spending. Ward doubts the budget can be put on solid financial ground without reversing some of the state’s tax cuts.
“The people saying that are the same people who voted for the tax experiment that led to massive debt, fiscal irresponsibility, two credit downgrades and our schools being found constitutionally inadequate,” said Ward. “I don’t take seriously their ideas.”
The new budget plan doesn't take into account adding any new money for K-12 schools to comply with a state Supreme Court ruling.
Republican Senator Ty Masterson, who helped craft the new conservative budget plan, said they’re not totally opposed to a tax increase. However, he has trouble with the tax increases being floated right now.
“If there’s something we decide as a Legislature we need to do, it does not have to be retroactive and it doesn’t have to be near the size of what’s being thrown around out there,” said Masterson.