USA|Kansas

Senate budget committee passes revenue package

The Senate Ways and Means Committee early Friday afternoon passed a revenue package worth slightly more than $434.2 million, including $21 million for the State Highway Fund. Only four committee members—Senators Pat Apple (R-Louisburg), Ty Masterson (R-Andover), Jean Schodorf (R-Wichita), and Mark Taddiken (R-Clifton)—voted against the bill, now put into Senate Substitute for HB 2630.

If passed in its entirety, the revenue bill easily meets the nearly $418 million shortfall resulting from the Senate budget bill passed on Thursday, with some additional money available for the State Highway Program. Already some members of the Ways and Means Committee itself signaled they plan to try and get the tax package amended down when it is debated on the Senate floor, likely Monday or Tuesday of next week.

Sub. for HB 2630 contains a varied mix of taxes offered in a proposal by committee chairman Sen. Jay Emler (R-Lindsborg) earlier on Friday. Following are the primary components of that package, as well as the anticipated revenue impact in FY 2011:

Sales tax increase to 6.3%, an increase of one-percent, beginning June 1, 2010. By moving the implantation date to June 1, the amount raised is increased by $21 million, for a total of $365 million;
Cigarette tax increase of $0.55 per pack, to $1.34, raising a total of $49.424 million;
Tobacco products increase, from 10% to 40% wholesale, for a total of $13.71 million; and,
IRS Section 199 Domestic Production Deduction add-back totaling $17 million. This is a federal deduction that automatically was accepted in Kansas, which is slated to grow from six-percent to nine-percent in FY 2011. The few corporations affected by this would still get the federal deduction, just not the three-percent growth amount for the state liability.

The package includes an expansion of the Food Sales Rebate Program, removing $6.9 million from the package, in consideration of the particular impact a sales tax increase has on the poor. A small amount of about $23,000 of the sales tax increase is diverted from amount dedicated to the State General Fund, for the Intermodal Utility Purchase.

Already, a strong tide is rushing in to begin dismantling portions, if not all, of the revenue package. Some are looking at revenue considerations in the House budget package that most close to the State budget process consider to be tenuous at best.

The Senate budget bill, Sub.for HB 2631, maintains K-12 funding at the FY 2010 level for the most part. The House bill, Sub. for SB 73, of course, does not.

The Senate is likely to debate the budget and tax bills as soon as Monday or Tuesday of next week, with the House taking theirs up day after. Now is the time for school leaders to contact their Senators, urging their support for HB 2631, the budget bill, and HB 2630, the companion revenue package. Make every effort to let parents and business entities in your area know how important their support is, as well. Legislators need to hear from a wide range of constituents just how critical this bill is to schools, as well as the overall economy of our state.