Contractors, cities and counties on Thursday tried to slam the brakes on a proposal by House Republican leaders that would divert $350 million in highway funds to pay for a cut in the state income tax.
“Now is not the time to take more money from transportation funding,” said Charlie Sedlock, representing the highway building company Hamm Inc.
“Right now, construction prices are low and the state is getting an outstanding value for each dollar spent on highway projects, and thus, it is not the right time to cut highway funding for some type of income tax savings,” he said in testimony to the House Taxation Committee.
The committee has been taking comment on the plan that would reduce income tax rates. House GOP leaders touted it as an alternative to Gov. Sam Brownback’s proposal to reduce income taxes.
Brownback’s plan would also eliminate many tax credits and deductions and keep in place the 6.3 percent state sales tax rate, which under current law is set to decrease to 5.7 percent next year.
The House Republican leadership plan keeps in the place the credits and deductions and allows the sales tax to decrease.
But to make up the revenue to buy down the income tax cut, it would divert $350 million from the state’s comprehensive transportation program.
“This plan allows Kansas to continue to invest in quality roads while putting money back into the pockets of hardworking Kansans,” a statement for House Republican leaders said.
But the proposal has produced road rage. “The bill will delay economic development and job creation at a time when Kansas desperately needs both,” said Julie Lorenz, chief executive of Economic Lifelines, a coalition of transportation groups.
A promise to restore the diverted funds over seven years was met with skepticism by advocates, who noted that transportation funds have been used in the past to balance the state budget, including $200 million last year.
Another part of the House GOP plan was also criticized. It would cut in half the Earned Income Tax Credit, which helps low-income Kansans. Brownback’s plan eliminated it altogether.
Kansas Action for Children said eliminating or reducing the EITC would hurt working families.