House overrides Brownback’s veto of tax bill; Senate voting later today

Rep. Tom Sloan, R-Lawrence, votes in favor of overriding Gov. Sam Brownback's veto of a tax bill that would have reversed many of the tax cuts that Brownback championed in 2012.

? UPDATE: Tax veto override vote falls short in Senate

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The Kansas House on Wednesday voted to override Gov. Sam Brownback’s veto of a $1 billion tax bill that would reverse course on many of the income tax cuts he championed in 2012.

The vote was 85-40, one more than the two-thirds majority needed for an override.

A vote in the Senate is expected later in the day. It takes 27 votes to override a veto in the Senate. The bill passed there last week by a vote of 22-18.

In his veto message, Brownback said the bill would punish middle-class families and small businesses, and he said he could not accept a bill that raises taxes retroactively. The bill is retroactive to Jan. 1 of this year.

“Moreover, applying a retroactive tax increase on our citizens is irresponsible and will ultimately harm families and individuals who are working to make ends meet,” Brownback said.

Rep. Steve Johnson, R-Assaria, who chairs the House Taxation Committee, took exception to that comment.

“I’d suggest that’s a strong word. I’d suggest that’s an unnecessarily inflammatory word,” he said while urging the House to override the veto. Without raising taxes, he said, lawmakers were left with a “cocktail of untasty choices” to balance the budget for the next two years.

But many who voted for the override pointed out that Brownback did, in fact, sign a tax bill in 2015 that made retroactive changes to the tax code, as well as an increase in sales tax that they said also hit the working class.

“I will not be lectured to by a governor who raised taxes on middle class Kansans 3 times in the last 4 years,” House Democratic Leader Jim Ward, of Wichita, said in a Twitter post.

Others said the 2012 tax cuts had gone “too far, too fast,” and that there was no other alternative to balance the state’s budget over the next two years without deep spending cuts.

The tax bill raises individual rates for individuals earning more than $15,000 a year and married couples filing jointly with incomes above $30,000 a year. It also reinstates a third tax bracket for individuals earning more than $50,000 a year, or couples with incomes above $100,000.

The bill also repeals one of Brownback’s signature tax cuts that he had once claimed would be “a shot of adrenaline into the heart of the Kansas economy,” the so-called LLC exemption that eliminates state income taxes on the nonwage business income of more than 330,000 farmers and business owners.

It also eliminates the so-called “march to zero” that automatically cuts tax rates starting in 2020 whenever state revenues meet certain benchmarks, and reinstates full deductibility of medical expenses.

The LLC exemption was a significant issue during the 2016 elections, even though it accounts for only about $230 million a year in reduced revenue, far less than the overall cut in individual rates. But many people view it as fundamentally unfair because it means doctors and lawyers who operate a partnership or limited liability company do not pay taxes on their incomes, but the secretaries, nurses and clerks who work for them do.

During his news conference, Brownback said he was not willing to give up on that part of his tax policy, although he might be willing to negotiate on portions of it.

“I don’t think there’s been a fair presentation of it,” Brownback said, despite the fact that it has been in place for four years. “We’ve offered adjustments, as I’ve noted. We pioneered this field. You’ve seen other places go to it now.”

He added, however, that he would be willing to negotiate some aspects of it, such as putting a cap on the amount of income that can be exempt, or taxing certain “passive” income such as rents and royalties.

But Johnson said those types of changes were unacceptable.

“How many other problems do we create by continuing to try and fine tune the winners and losers in our tax policy for the state of Kansas?” he said.

The Senate is expected to take up the veto override later Wednesday afternoon.