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Archive for Saturday, May 19, 2012

Kan. lawmakers unable to find smaller tax cut plan

May 19, 2012

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— Kansas was headed toward huge income tax cuts after conservative Republican Gov. Sam Brownback and the state Senate’s moderate GOP leaders couldn’t agree Saturday on lesser reductions to head off what some lawmakers feared would be a budget disaster.

Brownback and his allies believe that the state’s economy will get a big, jobs-creating boost from legislation already on his desk to cut individual income tax rates for 2013 and eliminate income taxes for 191,000 businesses. But they were willing to consider phasing in the cuts over six years to create what Brownback called “an easier glide path.”

Legislative leaders said Saturday morning that the tax debate was over and the most aggressive income tax cuts would stand. Hours later, discussions with Brownback’s office resumed but, then, almost as quickly, they ended without a deal, and the governor left the Statehouse.

“We’re not involved in any conversations at this point,” Brownback spokeswoman Sherriene Jones-Sontag said.

Lawmakers still had to complete a $14 billion budget for the next fiscal year to end their session, which was in its 98th day Saturday, eight more than scheduled. Legislators expected to leave another big task — redrawing political boundaries to reflect population shifts over the past decade — to a federal court.

Jones-Sontag said Brownback will have a ceremony Monday in Wichita to sign the conservative-backed tax cuts on his desk, which would be coupled with a sales tax reduction already planned for next year. The package is expected to provide $231 million in tax relief during the fiscal year that begins July 1, and the annual figure grows to $934 million in six years.

The Legislature’s research staff has projected that the cuts will lead to a budget shortfall by July 2014 and that the gap would balloon to nearly $2.5 billion by July 2018 if unchecked. But during a meeting of House Republicans, Brownback called their passage “a phenomenal accomplishment.”

“This will be a very aggressive pro-growth package,” he told reporters afterward. “For small business, which is your primary job-creating machine, this will have a very dynamic growth effect,” he said.

The Senate blocked debate Friday on a proposal to phase in the same income tax cuts awaiting Brownback’s signature. The less aggressive plan had emerged, with the governor’s encouragement, from negotiations.

Democrats and GOP moderates in the Senate still thought it would cause budget problems, despite projections from the Legislature’s staff forecasting budget surpluses at least through mid-2018.

Jones-Sontag said Brownback’s office offered a “global” agreement for senators providing additional money for public schools and even resolving redistricting issues — if senators accepted the phased-in tax cuts that they had refused to debate Friday.

“Some of our senators tried to negotiate a less dramatic tax cut,” said Senate President Steve Morris, a moderate Hugoton Republican. “Evidently, the governor wasn’t interested.”

The next fiscal year’s budget didn’t need much more tightening, because the state expects to have adequate cash reserves to cover the more aggressive tax cuts now on Brownback’s desk. But next year, legislators would be forced to close a budget shortfall, absent the robust growth predicted by supporters of the tax cuts.

“The state is going to be facing enormous deficits during the next several years,” House Minority Leader Paul Davis, a Lawrence Democrat, said during a news conference. “Everybody who is interested in the schools and social services and the transportation program and public safety needs to prepare for very significant cuts in the next couple of years.”

For 2013, the state’s top individual income tax rate would drop to 4.9 percent from 6.45 percent. The big tax break for businesses is targeted at partnerships, sole proprietorships and other small businesses, though critics believe many large companies will take advantage. Other changes in the income tax code are part of the bill on Brownback’s desk, with some deductions and credits being reduced or eliminated.

The sales tax will drop to 5.7 percent from 6.3 percent in July 2013. Lawmakers promised the reduction two years ago when they boosted the rate to close a budget shortfall, before Brownback took office.

Comments

Clevercowgirl 1 year, 11 months ago

Yeah! We've given Brownback enough rope.......

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Richard Heckler 1 year, 11 months ago

Wasted tax dollar spending will also increase:

Worker's taxes siphoned off by their bosses Thursday, April 26, 2012 | Posted by Jim Hightower

My congratulations to workers in 16 states – from Maine to Georgia, New Jersey to Colorado! Many of you will be thrilled to know that the income taxes deducted from your paychecks each month are going to a very worthy cause: your corporate boss.

Good Jobs First, a non-profit, non-partisan research center, has analyzed state programs meant to create jobs, but instead have created some $700 million a year in corporate welfare. This scam starts with the normal practice of corporations withholding from each employee's monthly check the state income taxes their workers owe.

But rather than remitting this money to pay for state services, these 16 states simply allow the corporations to keep the tax payments for themselves! Adding to the funkiness of taxation-by-corporation, the bosses don't even have to tell workers that the company is siphoning off their state taxes for its own fun and profit.

These heists are rationalized in the name of "job creation," but that's a hoax, too. They're really just bribes the states pay to get corporations to move existing jobs from one state to another, or they're hostage payments to corporations that demand the public's money – or else they'll move their jobs out of state.

Last year, Kansas used workers' withholding taxes to bribe AMC Entertainment with a $47 million payment to move its headquarters from downtown Kansas City, Missouri, to a KC suburb on the Kansas side, just 10 miles away. What a ripoff! Among the 2,700 corporations cashing in on such absurd diversions of state taxes from public need to private greed are Goldman Sachs, GE, Motorola, and Procter & Gamble.

For more information – and for ways you can help stop this despicable giveaway – get the full report, entitled "Paying Taxes to the Boss." It's available at www.GoodJobsFirst.org.

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Richard Heckler 1 year, 11 months ago

The longer Brownback stays in office the more tax increases will take place at the city and county governments. These tax increases will come by way of:

  1. Personal property taxes on all sorts of property
  2. sales taxes
  3. Increased user fees ( which are taxes any way you look at it) A. Trash B. water and sewer C. Swimming D. Rec Center Fees E. any type of increase within city/county government F. School fees will increase as Brownback works his desire to end public schools and fund " christian schools "and/or charter schools for profit with your tax dollars. Private industry is not necessarily fiscally responsible or efficient. Profit is the name of the game.

Cost of living is going up the GOP way and big government gets bigger.

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Alyosha 1 year, 11 months ago

Has the Governor stated what he is willing to do should what he believes will happen does not in fact pan out? Has a reporter asked that question and gotten an answer?

And the deficit fan commenters: should growth not happen, are you willing to admit you were wrong and that those of us warning that this is a tried and failed way to boost demand in the economy were right?

If not, you have no business taking in part in a representative democratic republic, I suggest, the demands of which require sound ethics and morality.

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tir 1 year, 11 months ago

Just wait for it. Lawrence liberals are not the only ones who will suffer from this deficit-creating piece of folly. In a year or so, it will become painfully apparent that the massive job creation Brownwhack promised is not happening because most of his buddies have just pocketed the lovely windfall he and the conservative legislature generously handed them with no strings attached. Then we will ALL be paying for Brownwhack's big gamble in some way, liberals and conservatives alike. There will be plenty of pain to go around.

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lawrenceguy40 1 year, 11 months ago

Excellent work by Governor Brownback and the legislators. Hopefully this will lead to a huge reduction in the number of bums "employed" by the State and living off the backs of the hard working taxpayers of Kansas. My neighbors and I have had enough of paying for bloated government and funding liberals who are allergic to work.

Liberal Lawrence will squeal like a pig, but it will be fun watching them lose their jobs on the hill as ku downsizes, if not closes completely. Life loving Conservatives will toss them a placenta every now and then so they can still make their smoothies.

169

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bobberboy 1 year, 11 months ago

mostly because of all the right-wing fundamentalist christian dingdongs we have in this state !

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bobberboy 1 year, 11 months ago

He was a worthless Senator and now he's a even more worthless Gov.

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bobberboy 1 year, 11 months ago

Brownback does not have a mandate - he was not elected with over 50% of eligible voters, because only around half of eligible voters even voted. We need a recall and we need everyone to vote this time. Brownback is an idiot !!

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JackMcKee 1 year, 11 months ago

Signing it on Memorial Day. How appropriate. Nice know you rural Kansas.

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sierraclub 1 year, 11 months ago

Please raise my taxes. Oh, Please raise my taxes. I need to pay MORE. Please do not cut spending. Please make it harder on the workers and raise our taxes.

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