Topeka The Kansas House easily advanced a bill Wednesday that would reverse many of the tax cuts that Gov. Sam Brownback championed in 2012.
The 83-39 vote was one vote shy of the two-thirds majority needed to override an almost certain veto by the governor, if the bill were to reach his desk.
House Bill 2178 would repeal the so-called LLC loophole that exempts certain kinds of nonwage business income from state taxes. It would also reinstate a third income tax bracket and raise individual rates for many wage earners to generate an estimated $1.04 billion over the next two years.
The vote came unexpectedly quickly on the House floor. While many observers had expected lengthy debate and numerous amendments, none of that materialized and instead House members proceeded directly to the vote.
House Speaker Ron Ryckman Jr., R-Olathe, who opposed the bill, said he was surprised by the margin, but he said it wasn’t clear whether that margin would be the same Thursday when the House votes on final action.
“I was a little surprised by the number of Democrats that did vote in favor. We’ll see what the number is tomorrow,” Ryckman said.
In the end, only three Democrats voted with Republicans to oppose the bill: Reps. Tom Burroughs, of Kansas City; Tim Hodge, of Newton; and Brandon Whipple, of Wichita.
Nearly all members of the Douglas County-area delegation voted in favor of the bill. They included Democratic Reps. Barbara Ballard, Boog Highberger and John Wilson, of Lawrence; and Republican Reps. Tom Sloan, of Lawrence, and Jim Karleskint, of Tonganoxie. Rep. Ken Corbet, R-Topeka, whose district includes a small portion of southwestern Douglas County, was the only local House member to vote yes.
During a caucus meeting before the vote, House Democrats were confident the bill had enough votes to pass. Minority Leader Jim Ward, of Wichita, said the biggest fear was that conservative Republicans would offer an amendment in hopes of splitting the coalition of Democrats and moderate Republicans who were supporting the bill.
One possibility was an amendment to completely repeal the tax cuts of 2012 and 2013, essentially reinstating the tax code that was in place before Brownback took office, a proposal that some Democrats said would be hard for them to vote against.
But that never materialized, and the bill ended up getting more support than most people expected.
Ryckman said he is still working with Brownback in hopes of finding a tax package he can accept. But with nearly the two-thirds majority needed to override a veto, supporters of the bill are growing less concerned about what Brownback will accept.
“I think it does send a clear message to the governor that the House is serious, and we’re going to try to fix this mess that he’s created,” said Rep. Tom Sawyer, D-Wichita, the ranking Democrat on the House tax committee.
Brownback issued a statement late in the day referring to the bill as the “Democratic tax bill,” even though it came out of a Republican-controlled committee and 47 Republican House members voted for it.
“Today, the House moved forward on the Democratic tax bill that would pummel the pocketbook of middle class families,” Brownback said in the statement. “It drastically hikes taxes retroactively on workers making as little as $15,000 annually. While on the campaign trail many of these representatives pledged to raise taxes on the wealthy, but now they are attempting to tax everyday Kansans. It doesn’t have to be this way. I will continue the fight to keep your income taxes low.”
After the House takes its final vote on the tax bill Thursday, it will turn its attention to two other bills aimed at closing the projected $320-$350 million revenue shortfall in the final months of the current fiscal year’s budget.
That plan, which largely mirrors Gov. Brownback’s plan, calls for borrowing $317 million from an idle funds investment account and delaying at least part of the final $90 million quarterly payment into the state pension plan.
Ward said after the House adjourned that passage of the tax bill will make it easier for many lawmakers to vote on the budget-balancing package, despite its reliance on delayed payments and one-time sources of money.
Meanwhile, the Senate is expected to debate tax bills Thursday and possibly Friday.
The Senate tax committee advanced two tax bills Tuesday: one by Senate Democrats that would raise an estimated $1.2 billion over the next two years; and a smaller plan backed by Senate GOP leaders that would raise an estimated $620 million over that same period.