Senate halts debate on spending cuts, tax package; Kansas’ credit outlook revised to ‘negative’

Sen. Marci Francisco, D-Lawrence, talks with Senate Majority Leader Jim Denning, R-Overland Park, after the Senate abruptly called off debate on a package of spending cuts and tax hikes aimed at closing a projected 50 million budget deficit.

? Republican leaders in the Kansas Senate abruptly canceled plans to debate a package of spending cuts and tax increases Thursday after support for the plan evidently collapsed over the previous 24 hours.

The Senate came into session around 8 a.m. Thursday but immediately recessed so Republicans could caucus on the two bills.

Senate Vice President Jeff Longbine, R-Emporia, said the two bills no longer had the 21 votes necessary for passage. He also said the Senate will not consider any other legislation, and it will strictly enforce other deadlines coming up, until consensus is reached on an alternative plan.

The package was aimed at closing a $320 million revenue shortfall to fund the last five months of the current fiscal year’s budget and raise taxes to close what GOP leaders have called a “structural deficit” in future years.

The Senate action came shortly after S&P Global Ratings revised Kansas’ credit outlook from “stable” to “negative” due to weak economic trends and “structural budget pressures.” S&P last downgraded its credit rating for Kansas in July 2016.

S&P Global Ratings rates Kansas bonds as AA-. Only three states — Illinois, New Jersey and Kentucky — have lower S&P ratings than Kansas.

The proposed spending cuts had sparked an outcry of protests, especially from public school advocates, because it called for cutting 5 percent, or $128 million, from K-12 schools, including $2.75 million from the Lawrence school district. The package also included $7.1 million in cuts to the University of Kansas and KU Medical Center.

In addition, the Senate was supposed to debate a tax package that would raise individual income tax rates and close the so-called LLC loophole that was part of the 2012 tax cuts that Gov. Sam Brownback championed.

Longbine said in the caucus meeting that by Thursday morning, there were no longer 21 votes for a 5 percent cut to education, and senators who wanted a compromise plan also could not muster 21 votes for even a 3 percent cut. Because of that, he said, support for the tax package also had collapsed.

Democratic Leader Anthony Hensley, of Topeka, however, said Republicans should be working with Democrats because the real number needed is 27 votes — the two-thirds majority needed to override an almost certain governor’s veto.

He and Senate President Susan Wagle, R-Wichita, said Republicans now need to focus all their attention on closing this year’s budget gap. To that end, they said the Senate will not debate any other legislation until consensus is reached on an alternative plan.

They also said they will strictly enforce upcoming deadlines for other bills to be considered at all this session.

Friday, Feb. 10, is the last day for bills to pass out of most committees. But the biggest deadline coming up is the so-called “turnaround” deadline on Feb. 23, the last day for bills to pass out of their chamber of origin.

— The Associated Press contributed to this report

Correction: S&P Global Ratings did not downgrade Kansas’ credit rating Thursday. The rating remains at AA-, but the agency revised its outlook on Kansas’ credit rating from “stable” to “negative.”