The Kansas Senate's top negotiator on tax issues said Wednesday that it's critical for the state to cancel a planned sales tax decrease if legislators want to cut individual income tax rates further.
Sen. Les Donovan, a Wichita Republican, defended GOP Gov. Sam Brownback's proposal to keep the sales tax at its current rate as negotiators for the House and Senate began work on the final version of tax legislation. The three senators and three House members must reconcile differences between the two chambers and were meeting on and off throughout the day.
The governor and many Republican legislators want to follow up on massive income tax cuts enacted last year, but the state also must stabilize its budget. Brownback proposed canceling a sales tax decrease scheduled by law for July; the Senate embraced the plan, but the House did not, opting to be less aggressive with a new round of income tax cuts.
Leaders of the Republican-controlled Legislature believe the two chambers can agree on a single, compromise plan, but House GOP leaders have said repeatedly that their chamber will insist on a decrease in the sales tax. But Donovan was adamant Wednesday that it is "absolutely critical" to keep the sales tax at its current rate.
"That is the bottom line, you might say, the lynchpin of whether this works or not," Donovan said.
The sales tax is 6.3 percent, boosted to that rate in 2010 to help balance the budget under Brownback's predecessor, then-Democratic Gov. Mark Parkinson. He and lawmakers promised that most of the increase would be temporary, and the tax is set to drop to 5.7 percent in July.
Lawmakers in both parties are reluctant to break the pledge, though some Republicans are willing to consider it with the promise of future income tax reductions. The powerful Kansas Chamber of Commerce has opposed canceling the sales tax decrease.
Lead House negotiator Richard Carlson, a St. Marys Republican, acknowledged that agreeing on the sales tax is "probably the most difficult problem we'll have." He noted that the House's tax plan passed by a wide margin.
"A number of members of our House felt that we couldn't pass that with the full 6.3 percent," Carlson said. "I'm certainly hoping we can find common ground somewhere."
The Senate's tax plan also embraces Brownback's proposals to guarantee cuts in individual income tax rates over the next four years, dropping the top rate to 3.5 percent for 2017 from the 4.9 percent set last year.
The House plan would promise cuts in personal income tax rates only following years in which overall state revenues grew by more than 2 percent. Legislative researchers have projected that the top rate for 2017 would be 4.88 percent.
Both chambers would phase out itemized deductions as income tax rates dropped, but would use different formulas.