Kansas Lawmakers Divided On Whether Fallout From Tax Vote Is Toxic

May 11, 2017

The drama unfolding in the Kansas Statehouse pales in comparison to the intrigue surrounding recent events in the nation’s capital.

But what’s happening — and not happening — in Topeka will determine the extent to which a group of new legislators elected last fall can fulfill the promises they made to voters to stabilize the state budget and adequately fund public schools.

The Senate’s rejection Wednesday of an income tax bill that would have generated more than $1 billion in new revenue eventually could prove to be a watershed event as lawmakers struggle to finish their work and close the 2017 session.

All 16 moderate Republicans in the 40-member Senate voted for the bill, though they acknowledged it probably would not raise enough new revenue to achieve their twin objections of balancing the budget and providing enough new money for schools to satisfy the Kansas Supreme Court

“I think it was a good compromise,” said freshman Republican Sen. Dinah Sykes, of Lenexa. “I was disappointed in the vote.”

Two Democrats also voted for the bill, which failed 18-22.

But seven Democrats voted against it, signaling their intention to hold out for a tax bill that more fully addresses the state’s budget and school finance needs.

“Until we see what we need to spend on schools, we’re in no position to pass any kind of a tax plan,” said Sen. Tom Holland, of Baldwin City, the ranking Democrat on the Senate Assessment and Taxation Committee.

A House committee working on a school finance plan will likely release its recommendations Friday. Moderate Republicans also were prepared to hold out until they received pressure from the Senate’s more conservative Republican leaders to support the bill, Holland said.

“This was a last-minute attempt to get them [the moderates] off the dime and have them settle for something less than what we need,” he said.

A question going forward is whether the vote undermined trust among moderate Republicans and Democrats who early in the session pledged to work together on budget and school finance issues as members of a newly formed “common ground caucus.”

“That is a concern,” said Sen. Tom Hawk, a Manhattan Democrat who voted for the tax bill. “But if trust has been lost, I think it can be quickly regained.”

Asked if he thought permanent damage had been done, freshman Sen. John Skubal, an Overland Park Republican, said, “I don’t think that has happened yet.”

But Rep. Russ Jennings, a moderate Republican from Lakin who ran unsuccessfully for speaker of the House, said he now considers Senate Democrats to be “unreliable partners.”

“I have a concern with that and their position at this point,” Jennings said on the KCUR podcast Statehouse Blend Kansas

Resorting to a football analogy, Jennings said the Senate passing the tax bill would have put lawmakers seeking a structural fix for the state’s budget problems in the “red zone.” The vote, he said, set them back “quite a ways.”

“I don’t know that we’re at midfield now,” he said.

Given that, he said, moderates must now decide whether to continue to work with Democrats on a bigger tax bill, which would need to pass by veto-proof majorities, or negotiate with Gov. Sam Brownback and conservatives on a combination of smaller tax increases and spending cuts.

“The Democrats could very well sit back and do nothing and require essentially that there be a Republican solution,” he said. “Clearly if there is exclusively a Republican solution it’s going to be far more to the right and overall in my mind less satisfactory in meeting needs.”

Senate Majority Leader Jim Denning, an Overland Park Republican, also said resuming negotiations with Brownback likely would be the next step in the process.

“My gut tells me now that we need to start moving toward the governor’s two-tier plan,” Denning said, referring to a plan that would adjust the state’s two current income tax brackets but would not reinstate a third, as the bill the Senate rejected would have done.

The Senate bill also would have reversed many of the income tax cuts that Brownback pushed through the Legislature in 2012, including a controversial exemption given to more than 300,000 business owners and farmers.

Earlier in the session, Brownback vetoed a similar bill that passed both houses with sizeable majorities. The House voted to override the veto, but the Senate fell a few votes short of the 27 needed for an override.

Any plan negotiated with Brownback will be difficult to pass, Holland said, explaining that it would need support from conservatives opposed to significant tax increases and moderates opposed to additional spending cuts.

“We all have the same end goal in sight,” Holland said, referring to Democrats and moderate Republicans. “I think we are at a point right now where just based on the moment we maybe have some disagreements on how we get there.”

Jim McLean is managing director of KMUW's Kansas News Service, a collaboration of KMUW, Kansas Public Radio and KCUR covering health, education and politics in Kansas. Follow him on Twitter @jmcleanks.