UPDATE 10:40 PM 6/6/2017: Kansas legislators have voted to override Republican Gov. Sam Brownback's veto of a bill that would repeal or roll back past income tax cuts he has championed.
The House voted 88-31 Tuesday night to overturn Brownback's veto of a bill that will increase income taxes to fix the state budget and provide additional funds for public schools. Supporters had four votes more than the two-thirds majority necessary to override a veto.
The Senate earlier voted 27-13 to override, exactly a two-thirds majority.
The tax increase is expected to raise $1.2 billion over two years by increasing income tax rates and ending an exemption for 330,000-plus farmers and business owners, commonly called the LLC exemption.
Starting in the 2017 tax year, the state will utilize a three-bracket system for income tax. The rates will raise again in 2018.
Kansas faces projected budget shortfalls totaling $889 million through June 2019 and the state Supreme Court ruled in March that education funding is inadequate.
Update 2 From Topeka: We saw @govsambrownback, he told us "I'm not making any statements right now" and closed the door @41actionnews pic.twitter.com/INy2YEdZup
— Ariel Rothfield KSHB (@arothfield) June 6, 2017
ORIGINAL STORY:
Republican Gov. Sam Brownback promised early Tuesday morning to veto an income tax increase approved by the GOP-controlled Kansas Legislature to fix the cash-strapped state's budget and meet a court mandate on funding for public schools.
Lawmakers approved a bill just after midnight that would raise $1.2 billion over two years by increasing income tax rates and ending an exemption for more than 330,000 farmers and business owners. It repeals or rolls back past income tax cuts championed by the conservative governor.
Brownback quickly responded saying he would veto the bill.
On Tuesday the leadership committees in the Kansas House and Senate were trying to get some people who voted against the tax plan to flip their votes.
The senate is just one vote away from doing so, but it will be heavier lifting in the house to get to the 2/3rds majority.
Julia Lynn, a Republican senator, said she's uncertain if there will be enough support for an override, and history could prove that right.
Back in February the same thing happened with a previous plan, and the override failed in the senate.
But, this plan is a little different.
"This tax package has different things in it. Things like child credits that weren't in the first one, some exemptions not in the first one. Even the governor wanted star bonds," explained Bruce Givens, a Republican senator from El Dorado.
Lynn also said if the veto is overridden and the $1.2 billion tax increase goes into place, every one in Kansas City and Kansas businesses will be left in the dust.
We were not able to talk with the governor about his response. He is out of state but should be back around 3 p.m. Tuesday.
Also sent Monday night to Brownback is another bill that would phase in a $293 million increase in spending on public schools over two years. The state Supreme Court ruled in March that education funding is inadequate and gave lawmakers until June 30 to pass a new school finance law.
The tax bill is meant to cover the higher spending on schools and close projected budget shortfalls totaling $889 million through June 2019. But Brownback issued a statement immediately after the tax bill's passage saying it had "many deficiencies."
"We have worked hard in Kansas to move our tax policy to a pro-growth orientation," Brownback said. "This bill undoes much of that progress. It will substantially damage job creation and leave our citizens poorer in the future."
The votes on the tax bill were 26-14 in the Senate and 69-52 in the House. The education funding bill passed by smaller margins, 23-17 in the Senate, and 67-55 in the House. Neither measure had the two-thirds majorities necessary in either chamber to override a veto, though Brownback did not say what he would do with the education bill.
The governor's veto threat sets up another confrontation with a Legislature that moved to the left after elections last year. With the state's budget problems persisting after the massive income tax cuts GOP lawmakers enacted in 2012 and 2013 at Brownback's urging, voters turned on his legislative allies, electing more Democrats and GOP moderates.
But Brownback's critics haven't been able to reach veto-proof majorities in both chambers. The governor vetoed a smaller income tax increase in February, and lawmakers did not override him.
Legislators were feeling intense pressure to wrap up their business because Tuesday was the 109th day of an annual session that was supposed to last 100 days and that is already among the longest in state history.
"The people of Kansas, in my mind, are willing to pay for the services that they value," said Sen. Randall Hardy, a moderate Salina Republican who unseated a Brownback ally last year. "We're going to stop the hemorrhaging."
Meanwhile, while GOP leaders argue the school funding plan will satisfy the Supreme Court, many legislators in both parties are skeptical.
The justices did not say exactly how much funding must increase when they set a June 30 deadline for lawmakers to pass a new school finance law. But attorneys for four school districts that sued the state in 2010 have said the increase needs to be much larger. Democrats have argued that the minimum is phasing in a $400 million increase over two years.
Democrats predicted the court will reject the plan and force lawmakers to have a special session to allow schools to open after June.
"It's wrong to put our kids, schools and communities through that risk," said Sen. Lynn Rogers, a Wichita Democrat.
Read Brownback's full statement on Senate Bill 30 below:
“I appreciate the efforts of legislators as they continue to work towards balancing the budget, building a school funding formula that puts students first, and ultimately closing out the 2017 legislative session.
“Given that this tax package was assembled and passed just today, I hope to avoid any unnecessary delays by announcing that I will veto Senate Bill 30, allowing the legislature sufficient time to address its many deficiencies and harmful impacts on Kansas families. We have worked hard in Kansas to move our tax policy to a pro-growth orientation. This bill undoes much of that progress. It will substantially damage job creation and leave our citizens poorer in the future.
“Earlier this year, I vetoed a tax increase that threatened to crush the Kansas economy, punishing individual Kansans and their families. Today, with Senate Bill 30, the legislature is looking to hike rates on Kansans even higher. Senate Bill 30 is a $1.2 billion tax hike, making it the largest in state history. This is bad for Kansas and bad for the many Kansans who would have more of their hard-earned money taken from them.
“Additionally, this tax increase is still retroactive and will affect individual families and small businesses in the 2017 tax year. Retroactively applying new taxes in the middle of the year is irresponsible and will harm families and individuals who are working to make ends meet.
“The people of Kansas deserve clarity in understanding how this bill will impact their families:
- Senate Bill 30 is the largest tax increase in state history.
- This bill hikes taxes $1.22 billion over two years, compared to the previously vetoed $1.04 billion tax hike in HB 2178.
- Low-income Kansans will be hit hardest because the low-income exclusion is cut in half.
- The bottom bracket marginal tax rate will increase by 14.8%.
- The middle bracket marginal tax rates will increase by 14.1%.
- The top bracket marginal tax rate will increase by 23.9%.
- Small businesses will lose their exemption for non-wage business income, instead paying up to 5.7% as they strive to create jobs and economic growth.
“Instead of imposing draconian tax increases on Kansas families, we must enact a pro-growth tax policy. Many alternative ideas have been discussed, and I believe there is a better solution. I have made many proposals, and several ideas have been considered by the legislature. We can and we must balance our budget without negatively harming Kansans.
“Once again, I remain committed to working with the legislature to develop a plan that balances our budget without permanently harming hard-working Kansans. Senate Bill 30 and its $1.2 billion tax hike is not the solution, and I will veto it for the sake of Kansas workers, Kansas families, and Kansas job creators.”
The Associated Press contributed to this report.
