Date: Jun 12, 2015 9:07 PM
The Senate, in about 90 minutes of debate this afternoon, passed 21-19 the “trailer” tax bill, that both solved and created a lot of political problems for lawmakers and raises a total of $384 million, leaving the last bite of budget balancing to Gov. Sam Brownback.
That tax trailer bill passage was the only real heavy lifting today, putting the last piece of the tax puzzle together and sending it to Brownback, who Thursday threatened dire budgetary consequences if he didn’t know the revenues likely for the state by Monday.
Passage of that second piece of the tax legislation set the stage for the relatively quick shut-down to be done, the Senate at 5:24 p.m., the House at 6:24 p.m. essentially off-duty until formal sine die adjournment of the 2015 session at 10 a.m.June 26.
Key to lawmakers getting away in daylight was that “trailer” tax bill, which raises some $384.7 million toward balancing the budget and charges Brownback with raising another $50 million at least to balance the budget.
The provisions of that trailer bill, which the House approved Thursday morning, meld with the previous tax bill to together make a start toward that “consumption-based” tax program that Brownback has touted for the years since the major individual income tax cuts of 2012 and the more vividly remembered business tax cuts and eliminations then.
The tax bill combo maintains the tax-free status of more than 300,000 LLCs, subchapter S corporations and owner-operator businesses that they have enjoyed since the 2012 massive individual and business tax cuts. It has become apparent that since Brownback didn’t get the “pay-fors” he sought in 2012, the tax cuts have outpaced the speedup Brownback promised in economic development, job growth and increases in spending on taxable “consumption” measured in sales tax revenues.
The tight Senate vote on the trailer bill drew a crowd of House members to the Senate chamber, largely because had the bill failed, there would have been little chance of adjournment this evening. Debate on the bill was by this time formulaic: Conservative Republicans touting the consumption aspects of the plan, moderates saying that businesses are getting a free ride and Democrats saying those 2012 tax cuts were ill-advised and have shifted the responsibility for government to working class Kansans who still pay income taxes and more of their income on sales taxable items.
Notable for Senate members was while the trailer bill raises sales tax from 6.15% to 6.5% on July 1, it doesn’t include a food sales tax cut, which was in the previously passed tax bill but extracted by the trailer bill with assertions that the Legislature can cut food sales taxes next year election year for the House and Senate.
The House-assembled trailer bill also fattened the amount of state revenues that can be used to trigger new income tax reductions in 2019.
It’s going to take several days for the interplay between the tax bills and the budget to be more clearly defined, but early projections yield a slim and still questioned $36 million ending balance in upcoming Fiscal Year 2016 unless Brownback pares at least $50 million from next year’s budget, which he received Thursday and hasn’t got much of a start on examining while he was pushing for the tax bills.
The House and Senate just before adjournment did make it simpler for Budget Director Shawn Sullivan who works at the pleasure of Brownback, of course in the upcoming fiscal year to make tightly targeted cuts in spending by state agencies. That new more precise authority for cuts was the final legislation approved today before adjournment 38-1 in the Senate and 102-0 in the House. That legislation shields debt service, KPERS, K-12 block grants and individual school district capital improvements from cuts.
I thought that I had seen everything. I was wrong.
Last night, so-called “conservative” Republicans in the Kansas Senate banded together to pass the largest tax increase — $470 MILLION — in the history of our state. And in that massive bill they inserted millions of dollars for private school vouchers. At a time when public schools are closing early because of budget cuts, these lawmakers turn around and give away millions of your tax dollars!Who pays for all of these taxes and other giveaways? YOU!
United Transportation Union - SMART
Kansas Legislative Director
Date: Jun 6, 2015 5:19 PM
Subject: Furlough bill to Brownback
The Senate, 39-0, passed the House-originated bill designed to stave off more than 10,000 state employee furloughs starting Sunday.
The measure designates all state employees as “essential” at least until sine die adjournment of the Legislature later this month, essentially making them furlough-proof.
The Senate had used the issue to try to speed action on budget and tax bills and close down the session, but minutes after the Senate rejected 34-5 a conference committee report on a Senate leadership-written tax bill, the chamber passed the furlough measure.
Politically, the Senate is now in the political clear, and it is Brownback who will make the decision on the massive and politically explosive furlough issue.
The governor’s office said they have not seen the bill, which has been available all day, and he will confer with officials to see what to do with it. The governor’s office didn’t put a time frame on his decision, or whether it would come today before midnight.
There are procedural matters in the way of formally proofreading and printing it, but practically, if the governor says he is going to sign the bill, everyone who might overrule or delay or complicate its enactment works for him. There is the matter of the official publication of the bill in the Kansas State Register, but it's the governor's employees who will carry out the provisions of the bill no matter when they read about it in the official state publication. So it now comes down to the governor furloughing or rescuing from furlough those thousands of state workers...
More debate is scheduled tonight. I will keep you posted of any interesting developments.
United Transportation Union - SMART
Kansas Legislative Director
Date: Jun 5, 2015 6:25 PM
Subject: Tax update
The legislature continues the budget crisis in the majority conservative goverment with no end in sight.
In a bigger-than-expected vote this afternoon the House, 82-27, rejected a conference committee report that imposed a 2.7% tax on non-wage income of LLCs, worth $101 million in the current fiscal year and probably the key to the lowest-possible sales tax rate increase to get the budget balanced this session.
Only Republicans voted in favor of the conference committee report with Democrats and some moderate Republicans casting the 82 votes against it.
That LLC tax was the key; Gov. Brownback said he would veto any bill that raised the LLC and other small business taxes from their current tax-exempt status for non-wage income.
The conference committee report also included the lowest sales tax increase from the current 6.15% to 6.45%, with reduction of the tax rate on food to 5.7% on Jan. 1 funded primarily by that LLC tax.
Rep. Tom Sawyer, D-Wichita, who is on the House-Senate conference committee on the bill, said he didn’t think there will be one that is as favorable to Democrats and their constituents as this one…but he voted against the conference committee report.
It appears that Democrats are going to let the 97 Republicans in the House fight among themselves to come up with a tax bill.
The conference committee on taxes will meet later tonight, and the House will reconvene at 10 p.m. to start considering whatever proposal the conference committee comes up with.
The House, on an 85-22 vote, did suspend its midnight “lights out” rule, meaning that the chamber can debate into the overnight hours.
House Majority Leader Jene Vickrey, R-Louisburg, said the House needs to work as long as it takes to get a tax bill to the Senate, at which time it becomes the Senate that is the focus of taxes, budgets and impending furloughs of thousands of state employees this weekend.
The Senate goes back into session at 8 p.m. and has a House passed budget conference committee report teed up, but there was no indication that the chamber would take action on it which would essentially stop those furloughs.
By this afternoon, nearly every branch of government was announcing furlough plans and apparently designating “nonessential” workers who can be laid off without pay but eligibility for unemployment compensation is in the air because there isn’t a budget bill passed.
Practically, that budget measure would authorize agencies to spend whatever money they have for salaries, but there are some sticking points about timing of passage and signing into law the budget, and some insistence that there is proofreading and such that has to be done before it can become effective.
The Kansas Department of Administration, which has for the past week been working on identifying state employees who might be furloughed, said this afternoon 7,109 of 17,556 workers who are under the direct jurisdiction of the governor (Cabinet level agencies) will be on furlough status, and there are several thousand workers at Regents institutions who have received furlough notices, including nearly 8,000 at KU facilities between 60% and 70% of employees would be furloughed.
Individual agencies have spent much of the afternoon putting out press releases saying what services will and won’t be available and when and where, during a furlough.
As the debate went on just about everything was blamed for the current situation. Many Legislators said the tax cuts are not the problem but spending is the problem, but none would bring forth specifics on where to cut. Some blamed Obama, and some were against income taxes in general. However, some did realize that the 2012 tax cuts do need to be repealed.
As of now it is truly anyone’s guess where this will go. We are in uncharted territory and will continue to voice our position that transportation funds and social services survive any further cuts.