Editorial: More reason to revive tax plan

A dreary economic forecast shows the necessity of revisiting legislation that was tantalizingly close to succeeding.

Kansas legislators banking on revised tax collection estimates to save the state’s budget got a dose of reality last week when the Consensus Revenue Estimating Group released its estimates.

The good news is things shouldn’t get worse. The bad news is things aren’t getting much better.

The Consensus Revenue Estimating Group, made up of university economists and state budget officials, uses trends in tax collections as well as economic forecasts to model estimates of future tax collections. In a report released Thursday, the group anticipates minimal change in the state’s lagging agricultural and energy sectors and a slight increase in the state’s unemployment rate. Basically, in the judgment of the state’s leading economists, the Kansas economy in the next two years will look a lot like it has for the past two.

The group did raise its estimate of total tax collections for the upcoming fiscal year by $43 million and by $62 million for the year after. But while $105 million helps, it still leaves an $889 million hole in the state’s budget. And that’s before accounting for the $150 million or more needed to comply with the Kansas Supreme Court’s recent ruling on K-12 education funding.

Gov. Sam Brownback, whose latest tax proposal was soundly rejected 37-3 by the Senate before the Legislature went on break April 7, won’t offer new tax legislation. That’s OK because new tax legislation isn’t needed and neither is the governor.

What’s needed is three more votes.

On Feb. 23, a tax bill came just three votes short in the Senate of overriding a Brownback veto. That bill, which had support from 109 of the state’s 165 legislators, would have raised $1 billion in new taxes by repealing many of the tax cuts Brownback has championed. It would have repealed the LLC loophole that exempts more than 330,000 farmers and business owners from paying income taxes on business income. The bill would have reinstated a third income tax bracket for individuals earning more than $50,000 a year, or married couples filing jointly who make over $100,000 a year.

All changes would have been retroactive to Jan. 1, 2017. Negotiating that issue could be the key to getting the bill to veto-proof support.

At the beginning of the session, legislators faced a two-year, $1 billion hole in the state budget. In the four months since, much has happened, but little has changed. The revenue estimates are in, the Kansas Supreme Court has ruled on education funding and the gap is still $1 billion. The best option when lawmakers return on May 1 is to revive the tax plan that nearly succeeded in February and do what’s necessary to ensure it is passed this time.