Archive for Monday, May 4, 2009

Senate cancels budget debate as work on compromise progresses

May 4, 2009, 2:56 p.m. Updated May 4, 2009, 11:08 p.m.


— The Senate canceled a planned debate on spending cuts and revenue-raising measures Monday to give members more time to draft a compromise to balance Kansas’ next budget.

But even as work on a compromise went forward, the Senate Assessment and Taxation Committee whittled away at tax proposals backed by new Gov. Mark Parkinson, a Democrat.

Chairman Les Donovan, a Wichita Republican, said the panel won’t even vote on a proposal to postpone previously approved tax breaks aimed mainly at businesses. Partisan disagreements over those breaks have threatened to delay work on a budget-balancing plan.

Parkinson and the Republican-controlled Legislature must close a projected $328 million deficit in the $13 billion budget for the 2010 fiscal year, which begins July 1.

The Senate had planned to debate a bill that included $127 million in cuts and $122 million in revenue-boosting measures. The bill would have left the state with a $69 million deficit.

But the leadership called off the debate minutes before it was to start. Majority Leader Derek Schmidt, an Independence Republican, said it seemed wiser to let various groups broker a compromise first.

“The camps don’t appear to be that far apart from each other,” Schmidt said, without getting more specific.

Senate leaders from both parties, as well as House Democrats and moderate House Republicans, met Monday morning with Parkinson. But House GOP leaders weren’t involved.

One attempt to pass a budget-balancing bill already has failed. On Friday, the House rejected a proposal that relied heavily on spending cuts to close the shortfall. Some moderate Republicans joined Democrats in voting it down.

In the Senate, the tax committee made some progress on revenue-boosting measures, agreeing to expand the secretary of revenue’s power to settle disputes over back taxes on appeal — a step expected to generate $35 million of revenue in fiscal 2010.

But Democrats also want the Legislature to consider proposals backed by Parkinson to delay nearly $97 million worth of estate, income and corporate franchise tax breaks. Businesses would lose $79 million in tax breaks.

The state has been phasing out its estate and corporate franchise taxes. Parkinson wants to suspend that effort for three years.

The Senate tax committee wouldn’t cancel the estate tax break but was weighing an alternative on the franchise tax, to generate $12 million for the state in fiscal 2010.

Parkinson also wants to “decouple” the state’s income tax code from the federal one, so that Kansas doesn’t automatically enact temporary federal tax breaks meant to stimulate the economy.

But Donovan said, “I don’t see this issue progressing any further.”

Many Republicans oppose Parkinson’s tax proposals, particularly decoupling, arguing that they’ll slow any economic recovery. Business groups such as the Kansas Chamber of Commerce are lobbying against them.

“The goal is to get back in the black without going back to the taxpayer,” said Sen. Ty Masterson, an Andover Republican who serves on the budget-writing Ways and Means Committee.

Democratic senators want to avoid additional cuts in aid to public schools, beyond the $76 million included in the bill the Senate was to debate. They also hope to block GOP proposals to cut state government employees’ pay.

“I think we are actually trying to come to some consensus,” said Sen. Laura Kelly, of Topeka, the ranking Democrat on the Ways and Means Committee.


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