House opts not to take vote on tax bill; back to the drawing board Tuesday

? Hopes that Kansas lawmakers might resolve a long-running stalemate over taxes and spending were dashed Monday when the House declined to even debate a $423 million tax bill that the Senate had passed the night before.

Both the House and Senate adjourned Monday evening with plans to come back Tuesday for the 110th day of the session.

Both chambers have passed a budget for the next fiscal year, which begins July 1, but current tax law would bring in $360 million less than is needed to fund it.

Senate President Susan Wagle appeared visibly frustrated Monday afternoon, after it became clear there weren’t enough votes in the House to pass the bill.

“We have a tax position now,” she said, referring to the Senate plan. “If the House has a different tax position that they want to negotiate on, then they need to show that position with the Senate in a conference committee.”

So far this session, no comprehensive tax package that would fill the state’s budget hole has received more than a couple dozen votes in the House. One that was based largely on Republican Gov. Sam Brownback’s proposal received only three yes votes.

Asked if the Senate had an alternative plan if the House could not come up with one of its own, Wagle said, “Yes. Allotments.”

That’s a procedure governors can use to unilaterally cut state spending if the budget director certifies that the state will not have enough money to fund the budget in place. It is traditionally used in emergencies when the Legislature is not in session.

Negotiators from both chambers tentatively scheduled another conference committee meeting for 9:30 a.m. Tuesday, but House tax committee chairman Marvin Kleeb, R-Overland Park, said that would probably be rescheduled for later in the day.

Objections to the bill

House members gave a variety of reasons for opposing the Senate-passed tax bill. Some did not like provisions such as the one that called for putting a four-year sunset on a whole host of tax exemptions and credits in current law, and another that would impose a property tax lid on cities and counties.

Neither of those provisions had ever been introduced as a bill or discussed in a committee meeting this session. The property tax lid was added as an amendment on the floor of the Senate last week. The sunset on tax exemptions and credits was a new idea introduced in the conference committee over the weekend.

Meanwhile, many moderate Republicans objected that the bill did not include re-imposing income taxes on more than 330,000 business owners whose non-wage business income was completely exempted from income taxes in 2012.

“To a number of members, that’s pretty big,” Kleeb said.

One of those moderate Republicans was Rep. Tom Sloan, of Lawrence.

“We need to revisit the income tax act from 2012 and 2013 to make sure business owners pay their fair share,” Sloan said. “And the reliance on sales tax is disproportionately hard on low- and middle-income Kansans.”

Lawrence-area Democrats also said they would have opposed the bill because of its provisions calling for higher sales taxes, while leaving the exemption for business income in place.

“There’s such a thing as fairness and equity,” said Rep. Barbara Ballard, of Lawrence. “How would you like to pay income tax while somebody next door didn’t pay their income tax?”

Conservative lobby groups such as Americans for Prosperity and the Kansas Chamber were also putting pressure on Republicans not to support the bill.

Mike O’Neal, a former House Speaker who is now president of the Kansas Chamber, said his organization had let lawmakers know that the vote on the tax bill would be viewed as a “key vote,” and that it would be remembered during next year’s elections when the Chamber is making endorsement decisions.

Next moves

Kleeb said that Republicans in the House would try again on Tuesday to come up with a plan. And he didn’t rule out the possibility that it might look very similar to the Senate’s bill, minus many of the controversial add-on provisions.

“The Senate really passed a bill with a lot of issues in there that had never been vetted in terms of committee process or anything like that,” he said.

Meanwhile, Wagle stressed that it’s up to the House to make the next move. And she said senators did not intend to wait indefinitely for the House to act.

“I have a lot of senators who have obligations at home. We’re a citizen legislature. Many of them were already scheduled back at work,” Wagle said.

The Kansas Constitution, however, prohibits either chamber of the Legislature from adjourning for more than two days without consent from the other chamber.