TOPEKA, Kansas — A new legislative proposal to give favored tax treatment in Kansas to groceries failed Wednesday to break a stalemate among top Republican lawmakers on tax issues, prompting GOP Gov. Sam Brownback to admonish them publicly that they need to finish their business for the year.
Republicans senators floated a proposal to impose a lower sales tax on groceries than on other consumer goods, starting in July. But top House Republicans rejected the plan, and negotiations on tax issues between the two chambers broke off until Thursday morning.
Brownback wants to raise additional sales tax revenues to prevent budget shortfalls following massive individual income tax cuts enacted last year and to allow Kansas to pursue further income tax reductions. But GOP legislative leaders — who share the governor's goal of eventually phasing out personal income taxes — can't agree on the sales tax rate.
The latest plan from Republican senators would have set the sales tax on groceries at 5.7 percent while taxing other items at 6.25 percent, starting in July. The current 6.3 percent rate is scheduled by law to fall to 5.7 percent then.
Republican leaders had promised the Legislature would meet this year for 80 days, trimming 10 days off the normal schedule. But Thursday was the 90th day, and the tax deadlock threatened to extend the annual session even past that mark.
Brownback said in a statement that legislators had "set the stage for economic growth" with their work on taxes.
But he added, "It is time to wrap up the session."
Top House Republicans have resisted canceling the decrease in the sales tax. It was promised three years ago, when then-Democratic Gov. Mark Parkinson and legislators boosted the tax to balance the budget.
During negotiations, House Republicans have proposed setting the sales tax at 6 percent.
Rep. Richard Carlson, a St. Marys Republican, and the House's lead tax negotiator, initially suggested that the new Senate plan showed the talks were leading in a "more positive" direction.
But hours later, he told senators, "We're pretty far apart."
Another team of negotiators has agreed on 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 want 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 rates drop. They've also considered proposals to help stabilize the budget by scaling back the state's standard deductions for married couples and heads of households, boosted to $9,000 last year.
The concept of 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.
But House Speaker Ray Merrick, a Stilwell Republican, dismissed GOP senators' latest proposal.
"When they have a real plan they want to bring over here, I'll have something to say," he said.
Senate GOP leaders then made room on the chamber's agenda Thursday for a possible debate on tax legislation, giving them the option of fashioning yet another plan.
"It's always good to have a Plan B, and we've got to break the logjam somehow," said Senate Majority Leader Terry Bruce, a Hutchinson Republican.
Democrats have been largely sidelined, and their leaders don't expect any of them to vote for any compromise that emerges. They argue 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.
Democratic negotiators questioned Wednesday whether Republicans can broker a deal — and suggested lawmakers might adjourn with no tax bill, leaving a budget shortfall to close next year.
"Somebody's going to have to blink," said Sen. Tom Holland, a Baldwin City Democrat.
Kansas Legislature: http://www.kslegislature.org
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