Property tax lid re-emerges in third tax proposal

Kansas lawmakers plan to vote sometime after midnight Friday on a budget-balancing bill that would include a kind of property tax lid for city and county governments.

That idea, which emerged as a surprise in the Senate earlier in the week, would require cities and counties to hold a public vote before they could increase property tax collections above the rate of inflation from one year to the next. That would apply even if the increased revenue is attributable to growth and new construction.

The House, however, has been leery of the idea. So under the latest plan, it would not take effect until Jan. 1, 2018.

The latest negotiated deal also includes higher sales taxes, but no new taxes on non-wage business income. It also would freeze current income tax rates in place for all other tax filers until 2020 while repealing many itemized deductions.

House and Senate negotiators agreed around 8 p.m. to run that plan, starting this time with the Senate.

The previous two tax plans started in the House, and both were defeated by overwhelming margins.

Lawmakers have until Saturday night to come up with a plan to balance the budget. If not, thousands of state employees will be furloughed starting Sunday.

House defeats second tax bill

The Kansas House just voted down the second budget-balancing bill in as many days. The vote shortly before 5 p.m. brought the state to within 31 hours of having to furlough thousands of state employees.

The bill was defeated on a vote of 27-82. Lawrence Democratic Reps. Barbara Ballard, Boog Highberger and John Wilson all voted no. Republican Tom Sloan of Lawrence was absent.

A few Democrats had initially indicated they might vote for it because it contained provisions they had advocated throughout the session: reimposing some income tax on non-wage pass through income of business owners; and a lower sales tax on food purchases. But it also called for raising the state sales tax by three-tenths of a cent, to 6.45 percent.

In the end, Rep. Tom Sawyer, D-Wichita, the ranking Democrat on the House tax committee, said the bill was a step in the right direction, but “it doesn’t go far enough.”

Republicans were sharply divided on the bill because it appeared to reverse course on the tax policy they adopted in 2012 that eliminated taxes for more than 330,000 business owners and called for phasing out all income taxes over several years.

House and Senate tax negotiators are scheduled to meet again at 6 p.m. to come up with another plan.

Some lawmakers are hoping to work through the night, if necessary, to come up with a plan to avoid furloughs. The House implemented a new rule this year that says it cannot meet after midnight, but the House voted to suspend that rule for tonight.

Second tax plan aimed at drawing Democrats and moderate Republicans

House and Senate tax negotiators offered up another tax plan aimed at balancing the state’s budget and avoiding furloughs, and it’s one clearly aimed at attracting votes from Democrats and moderate Republicans.

The conference committee met around 11 a.m., shortly before thousands of state employees received notices that they will be furloughed without pay starting Sunday unless lawmakers can pass a balanced budget before then.

The bill would impose income taxes, albeit at the lowest rate of 2.7 percent, on non-wage, pass-through business income for more than 330,000 business owners in Kansas. And it would repeal the formula known as the “march to zero” that is intended to phase out all income taxes over the next several years.

It would also raise the state sales tax rate to 6.45 percent, an increase of three tenths of a cent, effective July 1. But it would lower the sales tax rate on food to 5.7 percent starting Jan. 1. Sen. Marci Francisco, D-Lawrence, put that amendment onto the original Senate bill, and it drew strong bipartisan support on two recorded votes.

The bill has a number of other lesser provisions such as removing the sunset on the “Rural Opportunity Zone,” or ROZ, program that allows either a five-year income tax waiver or $15,000 of student loan repayment for people who move into any of the 77 rural counties that have suffered severe population loss in recent years.

It also has a 50-cent-per-pack increase in cigarette taxes, which many public health advocates support. But it would not, as the Senate had hoped, impose any new tax on e-cigarettes, based on the belief, not yet backed by data, that e-cigarettes are less hazardous to a person’s health than regular cigarettes.

Both Democrats on the conference committee, Sen. Tom Holland of Baldwin City and Rep. Tom Sawyer of Wichita, are still not agreeing to sign the report, which means the House and Senate have to go through another procedural hoop before they can vote on it. But Sawyer called this latest bill, “a step in the right direction.”

“We’ll take it back to our caucus and discuss it,” Sawyer said. “It’s not what we want maybe at this point in time, but at least it’s heading the right way.”

The House will vote first on the bill, probably sometime after 2 p.m.

Websites poke fun at legislative stalemate

As the Kansas Legislature goes into Day 106 of its regular 90-day session, and the threat of furloughs for tens of thousands of state employees looms less than 48 hours away, web denizens in Kansas haven’t lost their sense of humor.

One website popped up this week that probably offers the most accurate, concise and understandable summary of the current status of the stalemate. The name of the site says it all: www.DoesKansasHaveABudgetYet.com. Check it out for yourself.

Another site, with a bit more partisan edge to it, asks readers to nominate candidates for its mock “Stupid Tuesday Primary” in August.

An email to news media outlets promoting the site, ItsTimeToFixStupidKS.com, came from R. J. Dickens, who formerly served on the Kansas Democratic State Committee and was the party’s nominee for Secretary of State in 1990.

Dickens, who lives in the Wichita area, told the Journal-World the website was started by a group of Facebook friends, most of whom have been involved in Democratic politics in the past. He said the point of the website is to raise money that will fund negative advertising against “incumbent idiots” in the 2016 campaign. The online “Stupid Tuesday Primary,” which runs in August, will identify the targets of that advertising.

So far, all of the candidates nominated have been Republicans, but Dickens said his group isn’t necessarily limiting itself. He also said all of the negative advertising will have a humorous tone.

“We can’t keep crying about what’s happening in Topeka. Let’s laugh along with the rest of the world (yes, the whole world is laughing at us),” the website proclaims.

Coverage from Thursday, Day 105

• Tax bill fails in Kansas House; lawmakers to try again Friday