Threat of furloughs looms large as Kansas tax debate continues

The Kansas Senate on Monday shot down another tax proposal aimed at closing the state’s $400 million budget gap as the threat of having to furlough thousands of state employees looms on the horizon.

Sunday, June 7, marks the start of a new two-week pay period for state workers. Checks for that pay period will go out after July 1, the start of the new fiscal year. But without a budget, and a tax plan to fund it, state government will go into a partial shutdown in which all non-essential employees will be told to stay home.

Republican Gov. Sam Brownback’s press secretary Eileen Hawley said Monday each state agency defines for itself which employees are considered “essential” and which ones are not. She said that’s based on what’s called a “Continuity of Operations Plan,” or COOP, that agencies have in place for events like severe blizzards or other kinds of emergencies.

Hawley estimated that the state currently employs about 35,000 people statewide. Among the largest groups of state workers are those employed at the six Regents universities, including Kansas University in Lawrence.

She said employees who are designated as essential can be ordered to report to work, even if there is not yet a budget in place to pay them.

Both the governor’s office and legislative leaders have said the possibility of mass furloughs happening next week is extremely remote.

The bill put forward Monday in the Senate had several elements — many of the elements that Brownback proposed during a news conference Saturday, including a higher overall sales tax rate, and an income tax exemption for an estimated 388,000 low-income tax filers.

But as they did Sunday night, Democrats divided the question, forcing senators to vote individually on each piece, starting with the more popular piece, exempting the low-income wage earners from income taxes.

But when senators had to vote just on the sales tax portion, it went down in defeat, 8-30.

It was a carefully orchestrated move by Senate Democratic Leader Anthony Hensley, who recalled how Democrats and moderate Republicans were attacked during the 2012 election cycle because they had voted for a temporary 1-cent sales tax increase in 2010.

Recalling a speech that Senate President Susan Wagle, R-Wichita, gave during the 2010 debate, Hensley said: “She talked about how a 1-cent sales tax increase would ruin the economy. It would be terrible for families. It was something that she was passionately opposed to. And at that time, our economy was far different than it is today. At that time, our economy was in a tremendous downturn.”

“Now with the economy far different, we’re bbing asked to support an eight-tenths of a cent sales tax increase,” he said. “It’s not to fill in a revenue shortfall caused by downturn in the economy. It’s to fill in a shortfall that was caused by a failed economic experiment that’s been imposed on this state and this legislature. … And what I don’t understand is why we cannot acknowledge what the real problem is.”

Senate Republican Leader Terry Bruce, of Hutchinson, however, said the public supports the GOP tax policy of lowering income taxes, especially on businesses, and shifting the state toward more reliance on “consumption” taxes such as sales tax and excise taxes on tobacco and alcohol.

“We’ve since had two elections based on the higher consumption, lower income tax formula, and Republicans have been very successful in both those efforts,” he said. “And I think if we keep marching towards zero income tax, we’ll continue to have success at the polls.”

Brownback has told lawmakers that he will veto proposals that have been floated in the Legislature to reverse course on part of the 2012 tax plan by reimposing income taxes on the non-wage, “pass through” income of business owners. But even some Republicans have insisted that some kind of tax on non-wage income needs to be part of this year’s package.

“I really don’t give a damn what the governor thinks,” Sen. Ralph Ostmeyer, R-Grinnell, said during a GOP caucus meeting Monday. “If the governor doesn’t want to admit we have a problem, let’s get out of here and let him solve it.”

Bruce, however, said it’s been hard enough finding the 21 votes needed in the Senate, and 63 in the House, simply to pass a tax measure.

“If the governor vetoes something, our numbers have to go up,” he said.

That’s because it takes 27 votes in the Senate, and 84 in the House, to override a veto.

The House, meanwhile, has not taken up a tax bill in several days while it waits to see what happens in the Senate.

Late last week, the House and Senate agreed to an unusual procedure by putting what was basically an empty shell of a tax bill into a conference committee, thus allowing a small group of lawmakers — the top two Republicans and one Democrat from each of the tax-writing committees — to negotiate a package that would be sent to the full chambers for straight up or down votes.