Kansas governor says he’s not drawing clear lines on taxes

? Republican Gov. Sam Brownback said Wednesday that he’s not drawing “very clear lines” about what he’ll accept as the GOP-dominated Kansas Legislature considers reversing one of his major economic initiatives to help close a state budget shortfall.

Legislators in both parties said the tactic is helpful as lawmakers work on a plan for raising taxes to erase the projected $406 million deficit in the budget for the fiscal year beginning July 1. A business group’s lobbyist said a definitive veto threat from the governor could backfire, but a conservative GOP lawmaker said she’d like to have a definitive statement from him.

The governor’s comments came with the House Taxation Committee considering a plan to increase the state’s sales, cigarette and gasoline taxes. The measure also would restore taxes on some business income exempted by lawmakers in 2012.

Brownback advocated the 2012 policy as an economic stimulus, and it exempted the profits of 281,000 business owners and farmers from taxation. The Kansas Chamber of Commerce and National Federation of Independent Business are lobbying to preserve the tax break, and their representatives said Wednesday that they believe the governor has been clear in public statements about wanting to keep the policy.

But Brownback said during a brief interview, “I’ve purposely not drawn a lot of very clear lines and have been purposely saying I want to move off of income tax onto consumption tax, and let’s see what we can do.”

Brownback said his approach is “much more useful” for resolving tax issues. Legislators convened Wednesday for the 94th day of their annual session, four more than its leaders traditionally schedule, at a total cost of $43,000 per day.

“It is complicated, but I think the process is moving in the right direction,” he said. “It can get frustrating because you just want to get it done NOW, but you’ve got to work with people.”

The state’s budget problems arose after lawmakers cut personal income taxes in 2012 and 2013 at Brownback’s urging to stimulate the economy. They reduced rates, dropping the top one 29 percent.

Republican legislators are split over narrowing or repealing the business profits exemption. If they don’t, they’ll have to rely more heavily on raising sales, tobacco or gasoline taxes to raise new revenues.

Rep. Tom Sawyer of Wichita, the House tax committee’s top Democrat, said Brownback’s tactic makes it easier to repeal or modify the business profits exemption.

“I think the governor’s going to sign whatever we pass,” Sawyer said.

The House committee’s plan would raise $23 million during the next fiscal year by re-taxing some exempt business income. The Senate expects to debate a plan Thursday or Friday that would repeal the exemption and replace it with a less lucrative income tax credit against each business’ payroll, raising $82 million.

GOP Rep. Kasha Kelley, of Arkansas City, said the outcome is important because of the national attention Kansas has received over the 2012 and 2013 tax cuts and its move toward phasing out income taxes. She said officials who favor lower taxes should have a unified message.

“He should make his thoughts known,” Kelley said of the governor.

But NFIB lobbyist Dan Murray said a declaration from Brownback could intensify the debate over preserving the tax break because it could “ruffle some feathers.” House Taxation Committee Chairman Marvin Kleeb said Brownback’s tactic is helpful.

“We probably need to have a solid discussion among the legislators about what policy is going to be best for the state,” said Kleeb, an Overland Park Republican.