Topeka — The debate over whether to increase taxes to help lift the state from its current budget crisis will be held next week in the House, officials said Tuesday.
The House Taxation Committee advanced “without recommendation” a $169 million tax increase that would impose the state sales tax on residential utility billls. Churches and religious groups would also start paying the 5.3 percent state sales tax on goods they buy and the tax would be added to Kansas Lottery tickets.
House Speaker Mike O’Neal, R-Hutchinson, said the House will debate the measure, probably next week.
“This is an important debate to have,” O’Neal said.
O’Neal said he is opposed to a tax increase, but noted that Gov. Mark Parkinson, a Democrat, “has really put a lot of investment on taxes being part of the solution.”
Since the national recession started in 2008, Kansas has cut about $1 billion from a $6.4 billion state budget. Lawmakers face an additional budget shortfall that is nearing $500 million shortfall in the fiscal year that starts July 1.
House Bill 2549 would have removed numerous sales tax exemptions. Between 1985 and last year, the number of sales tax exemptions handed out by the Legislature has increased from 30 to 96, removing $4.2 billion last year in forgone taxes, according to the Kansas Department of Revenue.
Advocates for social services and education have urged passage of the bill, saying that while many of the exemptions are given to organizations performing exemplary work, the exemptions are increasing the tax burden on everyone else, and decreasing the amount of money available to provide basic services.
On Tuesday, Republicans on the Tax Committee restored into the bill exemptions for non-profit organizations and home repairs, which reduced the proposed tax increase by about $13 million.
State Rep. Arlen Siegfreid, R-Olathe, then made a motion to kill the entire bill, but state Rep. Jeff King, R-Independence made a substitute motion to advance the bill without a recommendation. That was approved by a voice vote.
That puts the issue of a tax increase before the full House for the first time this session.
Most of the revenue, about $130 million, would come from imposing the state sales tax on residential water, electric and natural gas bills
During debate on the bill in committee, state Rep. Steve Lukert, D-Sabetha, said a constituent told him that he opposed a tax increase and opposed cuts in services. “We obviously know that is not a solution,” Lukert said.