Sen. Les Donovan, center, R-Wichita, leads the Senate tax negotiating team Sunday with Sen. Tom Holland, D-Baldwin City, and Caryn Tyson, R-Parker. Donovan had threatened to resign his chairmanship during an outburst of frustration the night before.

TOPEKA ? Kansans would pay more sales tax on most items they purchase, but less tax on food, under a measure that passed the Kansas Senate on Sunday.

The Senate narrowly approved the $423 million tax plan — the largest in state history, according to some officials — that was needed to balance the state budget. It now goes to the House on Monday.

Combined with a separate insurance tax bill that both chambers passed Saturday night, the total increase in revenue next year would come to $471 million.

Moments after the tax vote, senators also passed and sent to Gov. Sam Brownback a budget which, when combined with the school funding and judicial budgets that already have passed, spends $6.4 billion in each of the next two fiscal years. The House passed the same budget plan last week.

The combined tax and budget plans preserve Brownback’s core policies of limiting growth in state government, eliminating income taxes on certain kinds of business income and gradually phasing out income taxes altogether in favor of more reliance on “consumption” taxes such as retail sales and tobacco taxes.

Assuming the tax plan passes the House on Monday, it ensures that more than 24,000 state employees who were within hours of being furloughed because of the budget stalemate will, in fact, be paid on time when their paychecks are due July 2.

“This has been a very, very long, difficult two weeks,” said Senate President Susan Wagle, R-Wichita. “I’m very thankful for my colleagues who have decided to govern, who’ve decided to balance the budget rather than throwing us into chaos.”

Shifting to sales taxes

The tax bill relies heavily on higher sales taxes to balance the budget. It would raise the state sales tax on most items by four-tenths of a cent, to 6.55 percent, starting July 1. That’s expected to generate nearly $188 million next year.

But starting July 1, 2016, it would lower the sales tax on food to 4.95 percent.

It does not re-impose any income taxes on more than 330,000 business owners whose non-wage business income was exempted from taxation in the sweeping tax cuts enacted in 2012, contrary to the wishes of some lawmakers. Democrats and many moderate Republicans had refused to go along with any tax plan that didn’t put that non-wage income back on the tax rolls. But Brownback had threatened to veto any tax bill that did tax such income.

The Senate plan, however, does tax one small category of non-wage income, the so-called “guaranteed payments” that are part of some partnership arrangements. That’s supposed to generate about $24 million next year, but many tax experts question that number because those businesses could easily reword contracts to shield that income from taxes.

Other elements of the plan include a 50-cent per pack increase in cigarette taxes; a new tax on e-cigarettes; reductions or elimination of most itemized deductions; and a “tax amnesty” plan that is supposed to generate about $30 million next year — though some officials have questioned that estimate.

The tax bill passed on a vote of 21-17. Nine Republicans joined all eight Democrats in voting no, including Democratic Sens. Marci Francisco, of Lawrence, and Tom Holland, of Baldwin City.

The budget bill passed 23-11. Holland voted against the bill. Francisco passed on the vote.

Luring conservative votes

Lawmakers in both chambers have battled for weeks over how to raise more than $400 million in new taxes or, in the alternative, whether to make deep cuts in the budget, as many conservatives had wanted.

The plan that finally passed the Senate on Sunday includes a number of smaller items that were meant to attract conservative voters who otherwise would have voted against any tax increase. Those include:

• Expansion of a type of private school voucher program that offers tax credits for those who contribute to scholarship funds that enable public school students to transfer to private or parochial schools.

• A property tax lid for cities and counties which, starting in 2018, would require them to get voter approval before increasing property tax revenues by more than the rate of inflation.

• And a requirement that to qualify for any kind of tax credit, all tax filers — except spouses of U.S. military personnel — must have a valid Social Security number for the entire year in which the credit applies.

The most controversial provision would put a sunset in four years on many sales tax exemptions, property tax exemptions and income tax credits. During those four years, a special commission would review those policies and recommend to the Legislature which ones should stay and which should be repealed.

Democrats were vocally critical of that provision. They noted, for example, that it allows the commission to review the sales tax exemption on residential utilities, but not agricultural utilities.

Republicans argued it is good public policy to review tax exemptions and credits periodically to determine whether they are achieving the intended goals.

Senate tax committee chairman Les Donovan, R-Wichita, said the state has done similar reviews in the past, with almost no result, because those programs all have strong public support. He predicted few of the exemptions or credits would be repealed through the new process.

Passing the budget

By the time the tax bill finally passed Sunday, swift passage of the budget bill was virtually assured. That bill had been sitting on the Senate calendar awaiting final action since June 3. In fact, after spending nearly three hours debating the tax plan, senators spent only about 15 minutes discussing the $6.4 billion budget.

Democrats, who knew the bill was certain to pass, pointed out that it relies on hundreds of millions of dollars in one-time money to be swept out of other special funds to pay for general state operations, including $132 million in each of the next two years out of the state highway program.

Sen. Laura Kelly, of Topeka, the ranking Democrat on the budget committee, also argued it cuts financial aid for students at public universities in favor of students attending private and religious colleges and universities in Kansas.

“Private colleges have 20 percent of our students in the state of Kansas,” Kelly said.

Francisco pointed out that it also takes $2 million out of a conservation fee fund at the Kansas Corporation Commission, limits tuition increases at state universities, and cuts spending for information technology.

“I’m very pleased that there are plans to coordinate the use of software,” she said. “But we also need plans to protect security for our agencies, and that’s a real lost opportunity to address that, and a concern because there will be expenses if there’s a breach in that security.”

The House is expected to debate the tax plan Monday afternoon. If it passes, both chambers plan to adjourn soon afterward, bringing the 2015 session to a close on its record-setting 109th day.