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Kansas Lawmakers Approve Budget and Dive into Tax Debate

House and Senate negotiators study documents during work on a tax proposal. (Photo by Stephen Koranda)
House and Senate negotiators study documents during work on a tax proposal. (Photo by Stephen Koranda)

Kansas lawmakers voted to inject money into state services, pensions and higher education just hours before debating legislation to send millions of dollars back to taxpayers.

Lawmakers approved a $6.6 billion state general fund budget with bipartisan support late Thursday and sent it to Gov. Jeff Colyer.

Senators then narrowly advanced a package of tax breaks on a 21-19 vote. That bill now awaits consideration by the House on Friday, the final day of the legislative session.

The tax bill was prompted by federal changes, which would mean many Kansans could no longer itemize on their state taxes. That would raise taxes for people who lost the chance to itemize.

The legislation would allow Kansans to continue itemizing, and trim their state tax bill, whether or not they do on the federal form. It would also add additional business expensing and cut taxes by reinstating state deductions eliminated or rolled back in recent years.

Republican Sen. Caryn Tyson, the chair of the Senate’s tax committee, said after last year’s tax increase, lawmakers should be sending money back to taxpayers. She said the loss of itemizing would hurt the lower-income Kansans who use the tax filing strategy.

“If we do not allow individuals like that the opportunity to itemize,” she said, “we are harming Kansans.”

An estimate from legislative staff pegged the cost of the tax break package at $78 million in fiscal year 2019, $73 million in 2020 and $43 million in 2021.

Lawmakers reversed the state’s 2012 tax cuts last year to stabilize the state budget after struggling with finances for multiple years.

Critics of the package, like Democratic Sen. Tom Holland, said it could cause further trouble for the state budget.

“Have we all forgotten what life was like last year?” Holland asked. “We’re still digging out, yet we’re going to turn around and bury ourselves again.”

The debate on the tax plan was a sharp departure from the budget passed earlier in the day, which boosted spending on many services. The House’s top budget writer, Republican Rep. Troy Waymaster, said the investments they added this year are needed after several years of austere budgets.

“We were able to identify projects, agencies and departments that had drastic cuts,” Waymaster said, “and build from that. It may not be solid footing, but at least we’re starting to move forward with it.”

Waymaster said salaries for state employees have been particularly paltry.

“In the past few years I think we sent the message that we took our employees for granted,” Waymaster said.

The spending plan includes $15 million from the state general fund to boost pay for state workers. Employees passed over for a raise last year will get larger increases under the budget plan.

Additional raises will also target judicial branch employees and corrections workers.

The raises won’t apply to university employees, state legislators and Kansas Highway Patrol officers.

The top Democrat on the House budget committee, Rep. Kathy Wolfe Moore, said the pay bump will help reduce pay discrepancies among employees.

“We have to have a fair pay plan, and this is a way to honor our very hard working state employees,” Wolfe Moore said.

Lawmakers had previously underfunded the state pension plan, KPERS, to help balance the budget. The Senate’s lead budge writer, Republican Carolyn McGinn, said the spending plan will make a missed $194 million payment over two budget years.

“We’re continuing to try to restore what has happened to KPERS in the last few years,” McGinn said.

The budget will also reverse some of the cuts universities and colleges absorbed in 2016 at the order of then-Gov. Sam Brownback. The new spending plan restores about $15 million of the $30 million that was cut.

Transportation funding sweeps in recent years have led to almost two dozen major road projects being delayed. The plan prioritizes those projects for future funding.

While the budget passed with big majorities in both chambers, some lawmakers raised concerns about the levels of spending. Republican Sen. Rob Olson said in the coming years the state budget would be out of balance unless the economy keeps growing.

“This balance sheet is loaded with debt,” Olson said. “We’ll probably be talking about another tax increase.”

Others hoped to see even more investment. Republican Sen. Barbara Bollier said after years of lean spending plans she wished they could spend more on substance abuse treatments and transportation.

“It’s been a long haul, seven years, of having to cut and cut,” Bollier said. “I’m concerned in certain areas we’re not spending enough.”

McGinn said they state would still be sweeping around $290 million from the highway fund as part of the spending plan. However, she said they were slowing the sweeps.

“We’ve started the process,” McGinn said.

Stephen Koranda is KPR's Statehouse reporter.