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Kansas lawmakers' March Madness is building state budget; this year, taxes are crucial piece

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TOPEKA, Kansas — Kansas legislators have their own form of March Madness, when they focus on building the next state budget after their annual session has cleared its midpoint.

The Republican-dominated Legislature began the month needing to erase a projected shortfall of nearly $600 million in the budget for the fiscal year that begins July 1. They also must decide whether they'll backtrack on personal income tax cuts enacted in 2012 and 2013 at GOP Gov. Sam Brownback's urging or whether to pursue other revenue-raising ideas.

Lawmakers also can't settle spending issues without deciding whether to heed Brownback's call to jettison the state's formula for distributing $3.6 billion in aid to public schools and give local districts "block grants" instead. Aid to public schools is the biggest item in the budget, consuming more than half the state's tax revenue, and GOP leaders hope to unveil a school funding bill this week.

The House Appropriations Committee and the Senate Ways and Means Committee have been reviewing Brownback's budget proposals for weeks. But March is when a full spending blueprint for the next fiscal year and another for the year after that are supposed to come together.

"The next two weeks, we'll have a lot more going on than the previous six or seven," said Rep. Marvin Kleeb, an Overland Park Republican serving on the Appropriations Committee and as House Taxation Committee chairman.

Lawmakers typically plan to have most of the budget approved by early April, before they begin their annual spring break, leaving an opportunity for adjustments after returning in late April to wrap up their business for the year. House Appropriations Committee Chairman Ron Ryckman Jr., an Olathe Republican, said he's hoping lawmakers keep that schedule this year, despite the state's difficulties.

The state's budget problems arose after the aggressive personal income tax cuts, which dropped the top rate by 29 percent and exempted 281,000 business owners and 53,000 farmers altogether. Brownback wants to retain those key policies but has proposed slowing down future tax cuts and increasing tobacco and alcohol taxes to help balance the budget.

The House Taxation Committee plans to hold a hearing Wednesday on Brownback's income tax proposals and Kleeb said it will review other revenue proposals over the next two weeks.

Meanwhile, Sen. Jim Denning, an Overland Park Republican who serves on the Senate Ways and Means Committee, said he wants to review the income-tax exemption for business owners. He said the goal was to exempt their profits so the money would go back into their companies, but the law exempted the salaries some owners pay themselves as well.

"I don't think that's what we voted for," Denning said. "I would like to look at those loopholes and close them, basically."

Ryckman added: "Nothing is off the table. That topic is still in play."

But Kleeb said he and many other legislators want to wait to vote on tax proposals, perhaps even until the end of the Legislature's annual session in May. He said they want to see whether spending can be tightened, and whether tax collections are stronger than anticipated, as they were in February.

Rep. Jerry Henry of Atchison, the Appropriations Committee's ranking Democrat, expects lawmakers to spend the month tacking between discussions of cutting spending and raising revenues.

"The heavy lifting hasn't even started yet," he said.


Online:

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


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