Business break stalls; other tax cuts advance

? Some $175 million in tax relief for businesses over two years remained stuck Wednesday night in the Legislature, as some Republican senators tried to divorce it from faster delivery of all jobless workers’ first unemployment checks.

Gov. Kathleen Sebelius, her fellow Democrats and some dissident Republicans supported a House-passed proposal to stop requiring workers to wait a week to start receiving unemployment benefits after they’re deemed eligible. It was part of a bill reducing the payments businesses must make to the state to finance jobless benefits.

Senators had approved the tax relief measure last month, but the House later added the proposal to eliminate the waiting week for unemployment benefits. That left senators with the option of approving the House’s version and sending it to Sebelius, who would have signed it.

Senators who support eliminating the waiting week tried Wednesday night to pass the House’s version, but it failed 23-17. House and Senate negotiators must meet again to draft something new, and the plan favored by Sebelius isn’t likely to emerge.

Business groups and GOP leaders opposed eliminating the waiting week because it would eat up $30 million over two years from funds employers already have paid to the state.

Sen. Karin Brownlee, R-Olathe, her chamber’s lead negotiator, promised a compromise, ending the waiting week for workers whose employers lay off 100 or more at a time and allowing workers to bunch two checks into a single week, a month after they start receiving benefits.

“We still need time to iron out the details,” she said.

However, legislators faced a time crunch: Department of Labor officials have told them the bill must clear the Legislature and reach Sebelius by the end of the week for businesses to receive any relief this year.

With an improved economy and the state collecting more revenue than expected, tax cuts have emerged as a big budget issue.

The Senate’s action came the same day the House approved, 121-1, a separate bill that would provide nearly $54 million in tax breaks for seniors, home owners and poor, working families during the fiscal year beginning July 1. That measure went to the Senate.

Also Wednesday, the House Taxation Committee endorsed a bill cutting corporate income taxes by nearly $6 million during the next fiscal year.

But the biggest tax cut proposal has been the unemployment bill before the Senate.

There’s been no disagreement that businesses deserve relief, because the state has a surplus of funds for paying unemployment benefits.

The relief provided by the bill would vary, with employers involved in few or no unemployment claims receiving the biggest breaks.

About 13,000 businesses wouldn’t have to pay anything. An additional 19,000 would have their payment rates cut in half, and the remaining 19,000 would see their rates reduced 40 percent.

Businesses’ desire for the relief has allowed some legislators to target the waiting week for jobless workers. The House’s plan was to eliminate the waiting week for two years, starting July 1.

“This is a trade-off that in my mind should have been a no-brainer from day one,” said Senate Minority Leader Anthony Hensley, D-Topeka.

While leaders of the Republican majorities in both chambers agreed on the unemployment bill, they remained far apart on the size of other possible cuts.

House leaders hope to approve tax cuts worth $50 million more than the Senate.