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Archive for Saturday, May 9, 2009

Back tax provision added to budget bill

May 9, 2009

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— Legislators gave final approval Friday to the last piece of a budget-balancing plan, sending a $61 million tax bill to Gov. Mark Parkinson.

The House approved the bill on a 65-56 vote after the Senate had passed it Thursday night.

The bill contains an “amnesty” provision giving the Department of Revenue more power to waive penalties on back taxes, with the goal of getting Kansans to pay up. It also gives Kansas less time to file for sales and income tax rebates and decreases income tax credits for businesses and others.

‘Last ship sailing’

With the bill’s passage, legislators have eliminated a projected $328 million deficit in the $13 billion budget already approved for the state’s 2010 fiscal year, which begins July 1.

The House vote on the tax bill also cleared the way for the Legislature to adjourn its annual session on its 88th day — shaving two days off its schedule, a small political plus in a year filled with ugly budget decisions. Friday was the 10th consecutive day of the wrap-up that followed legislators’ spring break.

“This is the last ship sailing,” said Rep. Jeff King, an Independence Republican, urging his colleagues to vote for the bill.

Democrats and moderate Republicans engineered passage of the budget-balancing plan in the House after a bipartisan majority pushed its two parts through the Senate. House approval came over the objections of the leaders of the chamber’s Republican majority, who wanted deeper spending cuts.

The other part of the plan was a bill with $138 million in spending cuts for fiscal 2010 and measures to boost state revenues temporarily, though not a general tax increase.

Critics noted that projected cash reserves for the end of fiscal 2010 are only $17,000. If revenues dip even a little below expectation in the coming months, the state will have a projected deficit again.

“Either we’re back here for a special session, or the governor makes the cuts,” said Rep. Brenda Landwehr, a Wichita Republican.

Diverting funds

The latest budget-balancing plan diverts funds from cities and counties and counts on the state receiving $50 million in licensing fees from yet-to-be-chosen developers for state-owned casinos in Sumner and Wyandotte counties.

House GOP leaders argued that solving the state’s financial problems — rather than merely pushing them off another year — required deeper spending cuts.

Backers of the successful budget-balancing plan said they didn’t want to give House Republican leaders a chance to push for those bigger cuts, particularly in aid to public school districts. House GOP leaders also briefly pushed an unsuccessful proposal to cut the salaries of the state’s 42,000 government workers by 5 percent.

But the state’s financial problems, caused by the economic recession, led to plenty of decisions most legislators found unpleasant. Before the latest budget-balancing plan, the state had two previous rounds of spending cuts and revenue adjustments to keep its budget in the black.

Public schools have lost almost $33 million in base state aid and special education funds, and the latest budget-balancing plan takes away an additional $84 million.

Their base aid, set at $4,400 per student last fall, will drop to $4,284, or by $116, for the next school year.

Higher education

State universities, community colleges and vocational schools would see their funding cut by an additional $22 million. Federal stimulus dollars soften the reductions but wouldn’t bring state support back to the level it was two years ago, and tuition increases are possible.

The Department of Corrections already has closed minimum-security prison units in Osawatomie, Stockton and Toronto, canceled contracts for boot camps in Labette County and closed reporting centers for parolees in Wichita and Topeka.

The Kansas Health Policy Authority, which administers the bulk of the state’s health programs for the needy, has said budget reductions and staff cuts will make it difficult to process applications for services in a timely manner.

And a hiring freeze has been in place for the state court system since November.

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