Reps. Tom Sawyer, left, D-Wichita, Scott Schwab, R-Olathe, and Taxation Committee chairman Marvin Kleeb, R-Overland Park, discuss the next strategy after a 32 million tax bill was defeated overwhelmingly in the House on Thursday, June 4.

Topeka ? House and Senate tax negotiators went back to work Thursday night after the first compromise plan they produced went down in overwhelming defeat on the House floor.

That brought the state another day closer to the deadline at midnight Saturday, when tens of thousands of state employees, including about 9,600 at Kansas University, will be furloughed because the state will not have legal authority to issue their paychecks after July 1.

The bill was similar to the package Republican Gov. Sam Brownback proposed late last week. It would have raised the state sales tax by half a cent, to 6.65 percent, while lowering the tax rate on food purchases to 5.9 percent.

“That would bring the sales tax rate in Lawrence to a staggering 9.2 percent,” said Rep. John Wilson, D-Lawrence.

He also noted that for some areas in Lawrence that are part of a transportation development district, where an additional 1-cent tax is levied, the total sales tax rate would go to 10.2 percent.

“By the way, that’s higher than New York City’s sales tax,” he said.

Democrats argued that raising the sales tax was unfair to working families and the elderly, who spend a higher percentage of their income on retail sales than wealthier people do. They also said it was unfair to raise taxes on them while continuing to exempt the income of more than 330,000 businesses from any taxation.

But the bill did contain other income tax provisions such as freezing the tax rates in place for the next three years for all other types of income and eliminating Brownback’s so-called “march to zero,” which would eventually phase out all income taxes in Kansas.

“The governor’s plan wasn’t real popular,” said Rep. Scott Schwab, R-Olathe.

Schwab conceded that many Republicans would like to have a vote on repealing, or at least scaling back, the business tax exemption, even though Brownback has threatened to veto any such plan.

“I think there are a lot of people in here that want that on the table,” he said. “They’re ready to have that conversation. And that (vote against the earlier bill) had to happen to get that conversation started. Will that pass? I don’t know.”

In the end, even Republicans who had planned to support the bill voted against it, realizing there was no point in going on record supporting a tax increase that wasn’t going to pass anyway.

House Speaker Ray Merrick, R-Stilwell, said he wasn’t surprised the bill was defeated.

“But the vote had to be had,” he said.

Schwab and other Republicans also said they were frustrated that the Senate had already adjourned for the night hours before the vote in the House, thus preventing lawmakers from continuing discussions late Thursday.

The conference committee — made up of four Republicans and two Democrats — initially scheduled another meeting for Thursday evening, but technical difficulties caused them to call that off.

Lawmakers will return Friday, the 106th day of the session, to try again to pass another tax bill to balance the proposed budget for next year.

The House has passed a budget bill that requires at least another $400 million in revenue to leave the state with a positive ending balance at the end of the next fiscal year.

The Senate has not debated that bill, and Senate Majority Leader Terry Bruce said Thursday he probably won’t bring it up before there is a tax bill to fund it.

Meanwhile, an alternative budget bill has been drafted, based on the possibility that lawmakers cannot agree on a tax package. It would impose a 6 percent across-the-board cut to all state spending, including K-12 education.