Kansas governor backs 'flat' income tax plan budget fix

 


TOPEKA, Kan. (AP) — Kansas Gov. Sam Brownback endorsed a flat-rate income tax plan Wednesday and lawmakers drafted a plan that would eventually boost aid to public schools by $750 million a year as they worked to fix deep budget problems.

The conservative Republican governor said he would sign a revenue-raising bill like one before the state Senate to impose a 4.6 percent rate for all personal income tax filers starting next year. Senators planned to debate the measure Thursday.

Lawmakers in both parties questioned whether the bill would raise enough money to fix the state's budget problems and satisfy a Kansas Supreme Court ruling last month on education funding. Critics said it would hit poor and middle-class families the hardest, but the measure appeals to conservatives who believe simplifying the tax code will make it fairer.

"My goal has always been to make Kansas the best state in America to raise a family and grow a business," Brownback said in a statement. "A flat tax accomplishes this goal by making taxes fair for everyone and encouraging economic growth."


Kansas faces projected budget shortfalls totaling more than $1 billion through June 2019. Even, so lawmakers are considering big increase in aid to public schools because the Kansas Supreme Court last month declared that the state's nearly $4.1 billion a year in education funding was inadequate.

A special House committee Wednesday agreed on a plan that would increase aid to public schools by $150 million for each of the next five years. The panel will vote later on the measure because some lawmakers want an outside attorney to review it to ensure that it would satisfy the high court's ruling in a lawsuit filed by four school districts in 2010.


The state's budget woes followed massive personal income tax cuts in 2012 and 2013 that Brownback championed and slumps in agriculture and energy production. Voters last year turned on him and his conservative allies, electing more Democrats and GOP moderates.

The Republican-controlled Legislature approved a bill in February that would have increased income taxes by more than $1 billion over two years, but Brownback vetoed it.

His endorsement of the Senate's flat-tax proposal involves a big concession. The measure would eliminate his signature income tax exemption for more than 330,000 farmers and business owners granted in 2012.


The 4.6 percent rate for all filers matches the top rate for higher-income earners in place now following past tax cuts. The Senate plan would eliminate the 2.7 percent rate for lower-income earners. But it would increase standard deductions for all filers and cut the state's sales tax on groceries to help poor families.

Still, Democrats and some moderate Republicans said poor and middle-class families would be the biggest losers under the plan. The bill Brownback vetoed had bipartisan support and would have moved Kansas to three income tax brackets, with a top rate of 5.45 percent.

Critics also didn't see the plan as an adequate fix for the state's budget woes. It would raise about $652 million over two years.

"It doesn't raise enough money," said freshman Sen. Dinah Sykes, a moderate Lenexa Republican. "It doesn't put us on sound footing. It doesn't solve the problem."

Brownback has also proposed increasing cigarette and liquor taxes. In addition, his budget proposals would authorize internal government borrowing, temporarily cancel scheduled increases in contributions to public employee pensions and divert highway funds to general government programs.

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This story has been corrected to show that the Senate proposal would raise $652 million over two years, not $690 million.

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Follow John Hanna on Twitter at https://twitter.com/apjdhanna .

 

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