By the end of February Gov. Sam Brownback will decide whether to give up his experiment with supply-side economics for Kansas.
House Bill 2178 passed both the House and Senate late last week. The measure would repeal income tax cuts made by the Legislature in 2012-13, at Brownback’s behest, and replace them with rates not as high as before, but enough to restore revenue and help overcome budget shortfalls.
Within the bill is removal of exemptions for 330,000 small businesses and farmers.
Rep. Kent Thompson, R-LaHarpe, told the Register Sunday afternoon he thought the bill would withstand a veto in the House. “I’m not sure about the Senate,” he added.
Repeal of the income tax cuts drew 83 votes of 125 in the House at first blush, and then, on final action was approved 97-48, with one member absent.
As majority whip, Thompson’s responsibility is to “count votes” ahead of a floor decisions. “I am pretty confident we would have enough votes to override a veto (84 would be needed) if that occurs,” Thompson said.
Brownback has 10 days from the vote, Thursday in the House and Friday in the Senate, to either sign it into law, veto the bill or, let it become law without his signature.
“I have no idea what he will do,” Thompson said.
In the Senate, the bill passed 22-18. To override a veto, 27 votes would be needed.
“If it came to the Senate the president (Susan Wagle) likely would have to vote for it and so would Caryn Tyson,” R-Parker, who represents Allen County and is chairman of the Senate Assessment and Taxation Committee. On Friday, they both voted against the measure.
Thompson thinks the House’s transition to a more moderate body as a result of the Nov. 8 election was critical to the Thursday decision. “It’s hard to raise taxes, but the new representatives had put bull’s-eyes on taxes in their campaign,” which, he thinks, was a factor in them overcoming intensive lobbying by Brownback supporters to retain the cuts.
“We had to do something,” he added. “We had to pay the bills and there wasn’t much left to cut,” although one earlier proposal was to reduce aid to public schools by another 5 percent.
IF TAXES are restored in the main, that will “go a long ways,” Thompson said, to solve projected budget deficits in fiscal years 2018 and 2019, estimated at more than $1 billion. “Not enough to take care of all of the problem, but a lot of it.”
That will have nothing to do with the current shortfall in fiscal 2017 budget of $320 million, which must be solved by June 30 within terms of the state’s cash-basis law.
Three proposals have resonated with legislators: Cut school aid and some other state financial responsibilities; borrow from the Pooled Money Investments Board, which oversees money put away over a number of years; sell off proceeds of the tobacco settlement, which annually funds children’s programs.
“We just can’t cut schools any more,” Thompson said, “and the tobacco money provides for some great programs.”
That leaves borrowing from the pooled investments as the favored approach, with a condition the money would be repaid over six years; or, about $53 million a year if tax revenue for February through June doesn’t perk up.
“That’s the best approach,” Thompson said, although it does add to the state’s indebtedness that has been compounded — remember the $1 billion borrowed for the Kansas Public Employees Retirement System — over the past four years because annual income has fallen short of expectations.
THOMPSON, on an optimistic note, said he was pleased to read in Saturday’s Register the piece by Burdett Loomis, a political scientist at the University of Kansas, that praised the sense of cooperation that has pervaded the Kansas Capitol.
“I’ve been there four years and this is a fun session,” Thompson said. “This is the way the process is supposed to work, with cooperation and discussion among Republicans and Democrats,” — not to mention within factions of individual parties.
For legislators to reach accord so quickly on a tax bill also is a rare occurrence in comparison to recent sessions, when budget decisions have come down to the 11th hour or forced a special session.
Remaining, among scores of more peripheral issues, is one that looms ominously on the financial horizon: What will justices of the Supreme Court decide on school funding?
Some forecasts were the decision would be handed to legislators early. “I have no idea when we’ll get it,” Thompson said. “I know they have other things on their docket, and I think when the research (they’ve ordered) is complete they’ll make a decision quickly.”
If a substantial increase in school funding is ordered, Kansas finances will take another hit, and likely generate more agitation among legislators.
