House GOP tax cut proposal would also cut highway program, transportation officials say

Highway projects would be delayed and possibly shelved if a House Republican leadership plan to cut taxes was approved, officials said Monday.

The proposal would divert $351 million from the comprehensive transportation plan, called T-Works, in order to replace revenue lost by the proposed reduction in state income tax rates.

“What it would mean is that we can’t deliver projects when we promised,” said Steve Swartz, a spokesman for the Kansas Department of Transportation.

House Republicans touted their proposal as an alternative to Gov. Sam Brownback’s tax-cutting plan. Brownback, also a Republican, would have reduced income tax rates, but also eliminated standard deductions and made permanent the 6.3 percent state sales tax, which is scheduled to decrease to 5.7 percent next year.

Under the House GOP leadership plan, income tax rates would be reduced, the deductions kept, and the sales tax would fall as scheduled.

But for two years, the House Republican plan would hold back some of the scheduled sales tax transfer to KDOT for the T-Works plan.

Rep. Richard Carlson, R-St. Marys, and chair of the House Taxation Committee, said of KDOT, “I’m sure they would prefer it not be done,” but added the agency would get its normal funding after two years.

That didn’t placate transportation advocates.

“We’re opposed to changing the way that T-Works was funded in the original legislation,” said Julie Lorenz, chief executive of Economic Lifelines, a coalition of groups that supports T-Works.

Lorenz said such a reduction would result in fewer highway projects getting done.

She also said the plan goes counter to a bi-partisan effort that was recently announced to accelerate $50 million of highway projects to take advantage of low construction prices and spur job growth.

Legislative hearings on the tax proposal are expected to start this week.

Democrats criticized the Republican plan.

“The transportation plan that passed the House in 2010 is the largest jobs package in Kansas history,” said House Democratic Leader Paul Davis of Lawrence. “It is wrong for House Republicans to propose eliminating those jobs at a time when over 50,000 Kansans are desperate to find work.”

He said Brownback’s plan increased taxes on low-income families, while the House GOP plan would eliminate transportation jobs.

“Both plans make the gap between the rich and the middle class wider,” he said. “We can do better,” he said. Republicans have described their proposals as pro-growth strategies that will help all taxpayers.