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Sale tax issue front and center as Legislature convenes today
Topeka — As legislators gather today for the start of the 2013 session, one of the main budget issues is whether to make permanent the 6.3 percent state sales tax, which under current law is set to fall to 5.7 percent on July 1.
Gov. Sam Brownback, a Republican, has talked about the possibility of extending the 6.3 percent levy as the state grapples with budget shortfalls caused by income tax cuts he signed into law.
But if he wants to do that, he may not get any help from Democrats.
In the depths of the "Great Recession," a coalition of Democrats and moderate Republicans in 2010 approved increasing the state sales tax from 5.3 percent to 6.3 percent to avoid deeper budget cuts .
Under the law, the increased rate holds for three years and then falls to 5.7 percent, with four-tenths of one cent going toward paying for transportation projects. Many of those moderate Republicans and Democrats who voted for the temporary sales tax increase were defeated at the polls.
Since Republicans hold significant majorities in the Legislature — 92-33 in the House and 32-8 in the Senate — it is possible to make the temporary sales tax permanent without Democratic votes. But that would require the votes of some Republicans who have pledged to oppose tax increases.
"There isn't any amount of political spin that the governor or those legislators who adamantly opposed the sales tax increase can put on this. If they want to extend the tax increase, it is a tax increase pure and simple," said Senate Minority Leader Anthony Hensley, D-Topeka.
Asked if Democrats might face the dilemma of cutting programs they support or voting to extend the tax, Hensley said, "Sam Brownback wants to extend the sales tax to pay for his income tax cut. Let there be no misunderstanding about this at all."
Even last year, Brownback had proposed that the state keep the 6.3 percent rate to offset income tax cuts.
He has argued that cutting income taxes does more to stimulate the economy than lowering the sales tax.
Keeping the sales tax at 6.3 percent would raise approximately $250 million for the fiscal year that starts July 1. The gap between current state spending and projected revenue for the next fiscal year is already weighing in at $700 million.