Kan. Lawmakers Revise Deal On Proposed Tax Cuts
The two Democratic negotiators remained skeptical and worried that projections from the Legislature's staff are too optimistic. They've also are critical of the business tax break, arguing that the plan will shift part of the state's income tax burden to poor and working-class families from the wealthy.
"We're creating a class of economic elites," said Rep. Nile Dillmore, a Wichita Democrat. "We're saying by virtue of the way you make your money, you don't have responsibilities that people who work for a living have."
But the Senate's lead negotiator, Les Donovan, a Wichita Republican, said the new tax break for businesses is likely to help small firms the most, and they will create new jobs. The plan will phase out taxes on some companies' income over five years.
"We have spent so much time on this and not making any headway," Donovan said. "It's time that we step forward and do something."Legislative negotiators originally had agreed to drop the state's top individual income tax rate to 4.9 percent from 6.45 percent for 2013. Under the revised plan, the top rate will drop to 5.5 percent for 2013, then decline by increments to 4.9 percent for 2017. "While we would prefer lower rates, this plan is a significant step in the right direction to increasing families' incomes and accelerates small business growth," Brownback spokeswoman Sherriene Jones-Sontag said in an email statement. "Governor Brownback encourages the Senate and House to take swift action on behalf of all Kansas taxpayers." Without the changes in the plan, the nonpartisan Legislative Research Department had forecast that a budget shortfall would emerge by July 2015 and grow to $712 million by July 2018. With the revisions, legislative researchers projected a budget surplus of $165 million in July 2018. The Legislature's staff and Brownback's administration disagreed about the methods used in making projections. The Department of Revenue issued a more optimistic forecast Wednesday evening showing that even if the tax plan didn't change, the state would still see a surplus of $138 million in July 2018.
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