The Senate and House defied Gov. Sam Brownback on Tuesday night by overriding his veto of a bill raising Kansas income taxes by $1.2 billion over two years to fill a gaping hole in state revenue and bank money to improve funding of public education.
Both chambers adopted the landmark tax legislation, but Brownback wasted no time in rejecting their work on the 108th day of the annual session. The Republican governor issued a veto message declaring Senate Bill 30 the largest tax increase in state history, clearly damaging to businesses’ job growth and destructive to the well-being of families.
The Senate, which contains 31 GOP members and nine Democrats, voted 27-13 for the two-thirds majority necessary to reverse the governor’s action. The threshold was attained when Sen. Rick Wilborn, R-McPherson, agreed to support the override after previously voting against the tax bill.
“The Legislature has the power to override the veto. I see no other path,” said Senate Vice President Jeff Longbine, R-Emporia.
The House put together a coalition to complete an override of the governor’s veto, striking that bell by a modest four-vote margin — 88-31. The GOP dominates the House numerically 85-40 over Democrats. More than two dozen representatives who voted against the tax bill one day earlier fell in line behind the override.
“This wasn’t an easy vote,” said Rep. Troy Waymaster, a Bunker Hill Republican and chairman of the House Appropriations Committee. “This does move the state of Kansas forward.”
The bill rejected by Brownback will eliminate large pieces of a 2012 law that dramatically lowered state income tax collections and was championed by the governor as an adrenaline shot to the heart of a Kansas economy hammered by recession. The bill due to become law will delete a state income tax exemption awarded to lawyers, farmers, doctors and owners of 330,000 businesses. It will return Kansas to a three-tier personal income tax model and boost rates across the board.
“I don’t want to be disrespectful to the governor. He still believes in it. I don’t,” said Senate Majority Leader Jim Denning, an Overland Park Republican who voted for the 2012 law.
“It would have been much easier,” said Rep. Stan Frownfelter, D-Kansas City, “for me to vote for Senate Bill 30 if it had contained a full-fledged repeal of the governor’s tax cuts.”
Sen. Tom Holland, D-Baldwin City, said the Legislature made a tragic decision four years ago to remove $750 million from the state’s income tax revenue and promise it would drive job growth. It made no sense to adopt a business-owner income tax exemption that granted 43 percent of the tax benefit to 0.67 percent of filers, Holland said.
“The so-called small businesses. I guess under that definition Georgia-Pacific is a small business,” said Holland, who ran for governor against Brownback in 2010. “I firmly believe this wasn’t about creating jobs. We should have got off this crazy train a long time ago.”
Rep. Larry Hibbard, R-Toronto, said constituents of legislators would likely be conflicted about the tax law. Some will think it too large of an increase and some will consider it as too small, he said. It is time to erase the smirk from the faces of people who joke about Kansas’ financial condition, he said.
“This tax bill starts us on the road to recovery. It’s going to be a long process. Let’s put this Capitol in the rearview mirror,” he said.
In the governor’s formal veto message, Brownback said he vetoed a bill increasing taxes in February and the larger tax bill Tuesday because they “threatened to crush the Kansas economy” by punishing Kansas families with large income tax hikes. Both bills irresponsibly implement a state income tax on business owners retroactively to Jan. 1, the governor said.
“Instead of imposing draconian tax increases on Kansas families, we must enact a pro-growth tax policy. Many alternative ideas have been discussed, and I believe there is a better solution,” Brownback said.
Sen. Vicki Schmidt, a Topeka Republican who voted in favor of the override, said the governor set the stage for a substantial tax increase by suggesting to the Legislature in January a budget that resembled a house of cards. He talked about closing a $900 million deficit over two years by selling off future tobacco settlement payments to Kansas in exchange for a one-time infusion of cash and recommended the state delay government contributions to the Kansas Public Employees Retirement System.
“The governor has refused to lead at every turn. The budget that he proposed required securitization of the tobacco funds, not making our KPERS contributions and many other bad ideas,” Schmidt said.
Sen. Caryn Tyson, chairwoman of the Senate Assessment and Taxation Committee, said the tax increase stiff-armed by Brownback was an ill-advised response to the failure of lawmakers to bring state expenditures in line with evolving revenue reality.
“We continued to spend more than we took in,” said Tyson, a Parker Republican. “We are in a situation, but this bill is not the answer. This bill increases income tax on individuals making as low as $20,000 a year. That means something. We need to consider those people.”
Rep. Willie Dove, R-Bonner Springs, said the profound increase in state taxes sent the wrong message to people who aspire to secure a good job, pay taxes, raise a family and start a business.
“The tax bill does not include any growth so far as putting individuals to work,” Dove said.
The National Federation of Independent Business and other political allies of the governor lobbied against an override, while public education and child advocate organizations pressed lawmakers to thwart Brownback.
“We think the Legislature can learn a lesson from small business and start living within its means. Small businesses understand you can’t spend money you don’t have,” said Dan Murray, state director of the independent business group.
Murray said imposition of an annual tax increase of $600 million would “reset the clock on Kansas’ economic recovery.”