Archive for Friday, May 17, 2002

Legislature approves $252 million tax plan, adjourns

May 17, 2002


— The Legislature approved $252 million in tax increases to prop up the state budget before adjourning the longest session in Kansas history early Friday.

The House approved a compromise tax bill, 63-59, breaking a session-long impasse in that chamber. The Senate's 23-15 vote followed, and it sent the measure to Gov. Bill Graves.

Both chambers also approved a compromise budget cleanup bill before legislators went home, having extended their 106th day in session until about 4 a.m. Friday. They planned to return May 31 for a brief ceremony marking the end of business for the year.

The outlines and many of the details for the tax package emerged early Thursday from discussions among moderate Republicans and Democrats in the House as something they could offer senators during negotiations. But an agreement wasn't final until just before midnight, when Graves and GOP leaders closed a deal.

Graves met with House Speaker Kent Glasscock and Senate President Dave Kerr after negotiations between their chambers broke off and they seemed ready to produce rival plans and force the other chamber into a take-it-or-leave-it decision.

The final package that passed would increase the sales tax to 5.3 percent on July 1 from its current 4.9 percent and impose that tax on customized computer software.

A tax of up to 15 percent would be imposed on the property inherited by nephews, nieces and non-relatives. The cigarette tax would increase by 46 cents a pack on July 1, to 70 cents, then another 9 cents, to 79 cents, on Jan. 1. The fees corporations pay to do business in Kansas would double.

Offsetting those increases would be breaks for businesses and a 50 percent increase in income tax credits for poor, working families.

Even with the tax package, legislators probably will not eliminate the gap completely in the budget to finance state government starting July 1. They needed $290 million to balance the $4.4 billion budget they sent to Graves earlier.

Graves had promised to call legislators into their first special session since December 1989 _ and threatened to cut $300 million from fiscal 2003 appropriations _ if lawmakers did not approve a tax plan.

His planned cuts included a reduction in state aid to public schools of $329 per pupil, making it $3,541.

Despite the tax plan's possible flaws, Kerr said, "It was a pretty good effort, a pretty good result."

Democrats had argued that increasing income taxes for wealthy Kansans was the fairest way to raise money, but Republicans said such changes would stymie economic growth.

The plan's provisions on computer software, corporate income taxes and tax credits for the poor were designed to attract Democrats, who had criticized relying on sales and excise taxes.

Yet many of them still weren't satisfied with the final product. In the House, only eight of 46 Democrats joined 55 of the 79 Republicans in supporting the bill. In the Senate, only two of 10 Democrats joined 21 of 30 Republicans in voting yes.

House Minority Leader Jim Garner, D-Coffeyville, called the measure "bad tax policy."

Sen. Paul Feleciano, D-Wichita, said: "It is an absolute disgrace that we're allowing this to take place at this late hour."

Conservative Republicans also were not happy, repeating their argument that the state shouldn't increase the tax burden on its residents during an economic slump.

"We're attempting to tap a well that is already dry," said Sen. Karin Brownlee, R-Olathe. "This is shameful."

Just hours before, the Legislature had appeared on the brink of adjourning without a tax plan. But Senate leaders relented in the face of some House members' desire for more time to work out an agreement.

Senate Majority Leader Lana Oleen, R-Manhattan, announced Thursday evening the chamber would adjourn until May 31, the date set for a brief ceremony to mark the end of legislative business for the year.

Oleen later said House members "found renewed energy," and senators agreed to wait.

When an agreement between negotiators proved elusive, and both chambers began work on their own proposals. Then, the final plan emerged.

"I knew somebody else was going to make the decision for me _ leadership and the governor," said Senate Assessment and Taxation Committee Chairman Dave Corbin, R-Towanda.

In other action:

A bill that represented legislators' attempt to shore up the state's 1999 comprehensive transportation program went to Graves.

Legislators put the redistricting process behind them with Senate approval of a plan for redrawing the state's four U.S. House districts.

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