GOP lawmakers in Topeka remain sharply divided over taxes - KCTV5

GOP lawmakers in Topeka remain sharply divided over taxes

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GOP leaders continue to debate a budget plan GOP leaders continue to debate a budget plan

Republican legislators remain sharply divided over how to close a looming budget shortfall even after debating tax proposals until early Monday and facing warnings that state workers could be furloughed soon unless there is a deal.

Top Republican senators outlined a plan for raising $411 million during the fiscal year that begins July 1, aimed at unifying the Senate's fractured GOP supermajority so it would pass at the end of a marathon debate on tax issues. The plan would increase sales, cigarette and business taxes and borrowed elements from a package Republican Gov. Sam Brownback unveiled Saturday.

But GOP leaders ended the Senate's debate early Monday without a final vote on any proposal. They took a post-midnight break to allow Republican senators review the new plan and were quickly on the defensive.

"You can take this plan and shove it," said Republican Sen. Greg Smith of Overland Park.

The Senate was debating the measure Monday evening.

Democrats are frustrated and concerned, as well as essentially helpless to resolve the disputes among conservatives.

"The Democratic caucus is concerned about getting out of this marathon session," said Sen. David Haley, D-Kansas City, adding this is the worst gridlock he's experienced. "We're at loggerheads with the governor and those who support his agenda.

In the House, GOP leaders released the results of an informal poll of the chamber's Republicans. It showed that the only proposal supported by the majority of respondents was an increase to the state sales tax, bringing it to 6.5 percent from 6.15 percent.

Unable to resolve tax issues, lawmakers have yet to pass a budget for the next fiscal year. Monday was the 102nd day of their annual session. Only two sessions have been longer -- 1991's, at 103 days, and 2002's, at 107, according to legislative researchers. Lawmakers traditionally set sessions for 90 days.

Each day costs taxpayers $40,000.

Budget Director Shawn Sullivan told GOP senators Sunday that all nonessential state workers will be immediately furloughed if the Legislature does not pass a budget by June 7. He said the state isn't authorized to pay workers beyond Saturday without a budget in place because of payroll rules.

He acknowledged that lawmakers could pass a short-term budget measure, but said, "I don't know that anyone thinks that would be a good option."

The state's projected $406 million budget shortfall for the next fiscal year arose after lawmakers cut income taxes in 2012 and 2013 at Brownback's urging in an effort to stimulate the economy.

One 2012 policy championed by the governor allowed 281,000 business owners and 53,000 farmers to avoid income taxes on their profits. Republicans are now divided over whether to raise some taxes on those businesses, with critics arguing that tax break had unintended consequences.

Revenue Secretary Nick Jordan relayed to GOP senators Sunday that Brownback intends to veto any measure that would establish a higher business tax, but some legislators said they were not impressed by the threat.

Republican Sen. Ralph Ostmeyer, of Grinnell, said during a meeting of GOP senators Monday that they should concentrate on finding a plan that can pass their chamber.

"I really don't give a damn what the governor thinks," he said.

Thirty-five of 71 representatives who responded to the House poll said they would support a 2.7 percent tax on net income from those businesses and Republican Rep. Mark Hutton, of Wichita, said that "does show there's support for our direction that's probably more than the other directions."

House Majority Leader Jene Vickrey, a Louisburg Republican, said the business tax is the "watershed issue." He said the groups wanting no tax increase and others wanting a plan more aggressive than Brownback's are roughly equal in size. Other House members want budget cuts, he said.

The governor's plan would tax the compensation business owners guarantee themselves, regardless of their profits. Brownback spokeswoman Eileen Hawley said it's merely closing what's widely perceived as a loophole.

The tax plan Brownback outlined Saturday would increase the sales tax to 6.65 percent from 6.15 percent and increase the cigarette tax by 50 cents a pack, to $1.29 from 79 cents.

The new Senate GOP plan includes the cigarette tax increase and embraces Brownback's modest business-tax proposal. But it would boost the sales tax to 6.5 percent. Taxes on groceries would be lowered by 6 percent.

The Senate's debate Sunday and early Monday instead focused on proposals from several GOP conservatives to eliminate exemptions to the sales tax, including those enjoyed by hospitals, blood banks and nonprofits such as the Boy Scouts when they buy goods. The vote was 30-9 against the idea.

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