Topeka The Kansas Chamber, which fought the state sales tax increase during the last legislative session, urged legislators on Monday to keep the increase in place and use the revenue to offset elimination of the state corporate income tax.
“That is the formula other states of like size to Kansas have used to grow their economies while at the same time maintaining and improving existing government services and infrastructure,” said Kent Eckles, a spokesman for the Chamber.
Eckles spoke during the House Tax Committee hearing on a bill that would repeal the 1-cent state sales tax increase that was approved during the last session and took effect July 1. The law increased the state sales tax from 5.3 cents per dollar to 6.3 cents per dollar. It will drop to 5.7 cents per dollar in 2013.
Conservatives, who added to their number in the November election, have made repeal of the levy one of their priorities.
During the last session, a slim majority of Democrats and moderate Republicans approved the tax increase above the protests of the Kansas Chamber, the largest business lobbying group in the state. During the November election, the Chamber helped fund candidates who defeated legislators who had voted for the increase.
But on Monday, the Chamber switched gears, saying the revenues from the increase should be used to eliminate the corporate income tax. Several conservatives seemed surprised by the Kansas Chamber’s position on the bill.
No action was taken on the bill, but Tax Chair Richard Carlson, R-St. Marys, said he would probably work on the bill later this session.
The Kansas chapter of Americans for Prosperity called for the repeal of the increased state sales tax, saying the tax rate was hurting Kansas’ economic recovery.
But a coalition of education groups argued against repeal, saying the loss of revenue — about $390 million per year — would cripple state services and throw the state’s budget into a deeper hole. Highway interests and several local chambers of commerce also urged the Legislature to leave the sales tax intact. Part of the revenue goes to road projects. Gov. Sam Brownback, a Republican, also has said he opposes repeal.