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Senate panel approves property tax increase for homeowners; sets aside tobacco, alcohol rises

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TOPEKA, Kansas — Kansas homeowners would pay higher property taxes under a proposal that a state Senate committee endorsed Tuesday, as the Republican-dominated Legislature began work on raising new revenues to close a projected budget shortfall.

The Senate Assessment and Taxation Committee approved proposals to raise about $50 million for the fiscal year that begins July 1. It would be a fraction of the $422 million that legislative researchers say is needed to avoid a deficit, which the state constitution prohibits.

"Sad to report, we didn't make hardly any progress today," Chairman Les Donovan, a Wichita Republican, told fellow senators at the close of the chamber's session Tuesday evening.

The committee tabled proposals from Republican Gov. Sam Brownback to increase tobacco and alcohol taxes. His measures would boost the tax on a pack of cigarettes to $2.29 from 79 cents and on packaged liquor to 12 percent from 8 percent.

Committee members instead opted for a proposal to increase property taxes for most homeowners by $46 a year. They also endorsed a measure to overhaul how property taxes are imposed on vehicles, saving owners money overall but boosting property taxes collected by the state. They're folding proposals into a single bill and expect to vote on the package later.

The House Taxation Committee reviewed the governor's proposals but took no action. Republican Rep. Gene Suellentrop, of Wichita, said he and other lawmakers will have a "global" tax plan later this week but wouldn't provide details to reporters.

Both committees are likely to consider proposals to increase the state's sales tax and to narrow a personal income tax exemption enacted in 2012 for 281,000 business owners and 53,000 farmers. Lawmakers in both chambers also have suggested increasing the state's gasoline tax.

The state's budget problems arose after legislators slashed personal income taxes in 2012 and 2013 at Brownback's urging in an effort to stimulate the economy. Besides enacting the exemption for business owners and farmers, the state cut personal income tax rates, dropping the top rate 29 percent.

PHOTO: Chairman Les Donovan speaks to reporters following a meeting of the Kansas Senate Assessment and Taxation Committee, Tuesday, May 5, 2015, at the Statehouse in Topeka, Kan. The committee is working on a plan for raising taxes to help balance the state budget. (AP Photo/John Hanna)
Chairman Les Donovan speaks to reporters following a meeting of the Kansas Senate Assessment and Taxation Committee, Tuesday, May 5, 2015, at the Statehouse in Topeka, Kan. The committee is working on a plan for raising taxes to help balance the state budget. (AP Photo/John Hanna)

"If we want to do our finances justice, we need to go back and revisit those tax policies and not look at basically shifting the tax burden," said Democratic Sen. Tom Holland, of Baldwin City.

Brownback has said he doesn't want to tinker with the income tax exemption for business owners, calling it the state's key policy for boosting small businesses and their hiring. He and GOP legislators also don't plan to rethink past cuts in income tax rates.

But in pursuing other tax increases to balance the budget, Brownback and GOP legislative leaders must overcome opposition from conservative, small-government Republicans.

"We have to slow down our spending," said Rep. Jerry Lunn, an Overland Park Republican. "That's the problem."

The Senate committee's proposal on property taxes for homeowners would eliminate a partial exemption they receive from a state levy that funds public schools. The state imposes a tax of $2.30 for every $1,000 of a home's appraised value but exempts the first $20,000 of value.

The owner of any home worth $20,000 or more would pay $46 more a year in property taxes, regardless of the home's total value.

The other proposal endorsed Tuesday by the Senate committee would change how vehicles are valued for property tax purposes, generally to the benefit of their owners. It would offset those savings by imposing a property tax for schools of $4 for every $1,000 of the vehicle's value, dropping it to $2.40 by 2019.


Online:

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


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