ASSOCIATED PRESS: Coalition seeks income, gas taxes hikes to fix Kansas budget

December 7, 2016

Teachers, a state workers’ union and other Kansas groups long critical of Republican Gov. Sam Brownback have proposed undoing the income tax reductions he’s championed and boosting the state’s gasoline tax to fix persistent budget problems.

The Rise Up Kansas Coalition’s plan, unveiled Wednesday, is the first detailed package for the GOP-controlled Legislature to consider after convening its annual session in January. Whether it will be is yet to be seen, as it’s not a bill championed by a specific lawmaker.

The debate in Kansas could occur as Congress mulls proposals from President-elect Donald Trump to cut the federal government’s top tax rate and reduce the number of tax brackets – both of which Kansas did in 2012 and 2013. Since then, the state has struggled to balance its budget and faces projected gaps totaling $1.1 billion in spending for existing programs through June 2019.

Elections this year left the Legislature less conservative, and at least one key revenue-raising idea the coalition has put forward is on GOP lawmakers’ list of potential solutions.

“The ultimate goal is to arrive at a long-term solution that doesn’t have us moving from crisis to crisis,” said Annie McKay, president and CEO of the advocacy group Kansas Action for Children, part of the coalition that also includes teachers, highway contractors, children’s advocates, the largest union for state workers and a think tank that describes the Brownback tax cuts as harmful.

Brownback spokeswoman Melika Willoughby criticized the plan, which says the state would raise $821 million during the fiscal year that begins July 1, as coming from “liberal special-interest groups.” She said its “victims” would include middle-class taxpayers “working hard every day to put gas in the tank and money in their pockets.”

The income tax cuts were touted by Brownback and others as a way to stimulate the economy, but even some GOP voters view the experiment as a disappointment.

Critics also contend the policies – including going from three to two brackets and cutting its top personal income tax rate by 29 percent, to 4.6 percent – benefited the state’s wealthiest residents most.

The coalition’s plan would revive the third tax bracket and the old top rate of 6.45 percent for individuals earning $40,000 or more and married couples earning $80,000 or more annually.

The state also exempted more than 330,000 farmers and business owners from paying income taxes on their profits or other non-wage income, such as royalties. The plan would eliminate the exemption, which some GOP lawmakers also have suggested.

Motor fuels taxes would increase by 11 cents a gallon, to 35 cents for gasoline, to help finance highway projects so other revenue could be diverted elsewhere.

Offsetting the tax increases, the state would drop its sales tax on groceries to 5 percent from 6.5 percent to help poorer families.

It would not address a projected $345 million shortfall in the current budget, but coalition members said the short-term gap could be addressed after lawmakers settle on a long-term budget fix.

Senate Minority Leader Anthony Hensley, D-Topeka, called it “a good starting point.” But incoming House Speaker Pro Tem Scott Schwab, a conservative Republican from Olathe, said GOP lawmakers are likely to be wary – particularly because the plan would affect farmers who are battling a slump in agriculture.

Read more from the Associated Press.

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