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Kan. lawmakers' sales tax talks take new twist

5/22/2013

By JOHN HANNA

By JOHN HANNA

AP Political Writer

TOPEKA -- Kansas legislators Wednesday considered a proposal to impose a lower state sales tax on groceries than on other consumer goods in hopes of breaking an impasse among Republicans on tax issues.

GOP senators floated the new sales tax proposal during negotiations with House members on legislation that also would cut individual income taxes further. The biggest disagreement between Republican leaders in the two chambers has been over how much the state's 6.3 percent sales tax should drop in July.

The sales tax is set by law to decline to 5.7 percent, but last year, Kansas enacted massive personal income tax cuts. Republican Gov. Sam Brownback and GOP Senate leaders have said allowing the sales tax much below 6.3 percent will cause budget problems and prevent Kansas from reducing income taxes again.

In negotiations, House Republicans proposed setting the sales tax at 6 percent and GOP senators, at 6.25 percent. Under the new proposal, the sales tax would be 6.25 percent, except on groceries, for which the levy would be 5.7 percent.

"We have another avenue to pursue that might get us some votes," said lead Senate negotiator Les Donovan, a Wichita Republican and chairman of his chamber's Assessment and Taxation Committee.

The Republican governor and many members of the GOP-controlled Legislature want to eventually phase out personal income taxes, believing it will boost the economy. But top House Republicans have resisted canceling the decrease in the sales tax, which was scheduled three years ago when then-Democratic Gov. Mark Parkinson and legislators boosted the tax to balance the budget.

The tax negotiators expected to meet throughout the day, and Republicans said they're eager for progress, with the Legislature's annual session already lasting longer than planned.

"We're moving in a direction that is more positive than we were moving," said lead House negotiator Richard Carlson, a St. Marys Republican and chairman of his chamber's Taxation Committee.

Another team of negotiators agreed Tuesday on the details of a state budget of roughly $14.5 billion for each of the next two fiscal years, beginning in July. The House would take up the compromise spending plan first, and its Republican leaders wanted a deal on tax issues first.

The tax negotiators have considered a variety of proposals for dropping individual income tax rates over the next four years while scaling back income tax deductions as rate drops. They've also considered proposals to scale back the state's standard deductions for married couples and heads of households, boosted to $9,000 last year, to help stabilize the budget.

But setting the sales tax rate is the key to an agreement. The concept of having a lower sales tax on groceries -- or no sales tax at all -- is decades old, and freshman Republican legislators floated the idea Tuesday. Many other states don't impose the sales tax on groceries or, like neighboring Missouri, impose a lower tax.

Democrats have been largely on the sidelines, and their leaders don't expect any of them to vote for any compromise that emerges. They argue that last year's income tax cuts were reckless and should be at least partially reversed.

Also, Democrats oppose the GOP's goal of shifting most of the burden of funding state government to the sales tax because poor families tend to pay a higher percentage of incomes than wealthy ones.

Republican leaders had promised that the Legislature would wrap up its business this year in 80 days, trimming 10 days off the normal schedule. But Wednesday was the 89th day of the session.

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Online:

Kansas Legislature: http://www.kslegislature.org

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