Brownback Says “Budget Reality” Will Block Push to Drop State Sales Tax

(AP)–Gov. Sam Brownback said Thursday that Kansas’ “budget reality” will push lawmakers toward approving his proposal to cancel a scheduled decrease in the state sales tax.

The Republican governor said he will consider “anybody’s proposal” as the GOP-dominated House and Senate negotiate the final version of tax legislation. But Brownback also said legislators have limited options for stabilizing the budget while seeking further cuts in individual income taxes.

Brownback and most Republican legislators want to follow up on massive income tax cuts enacted last year with another round of reductions in personal income tax rates. Last year’s cuts created a budget shortfall, and Brownback has promised to protect important programs, such as education funding and social services.

Meanwhile, the state’s 6.3 percent sales tax is scheduled by law to drop to 5.7 percent in July, the result of a budget-balancing agreement in 2010 that temporarily boosted the tax to its current level. Legislators in both parties don’t want to break the pledge, but some are willing to do it with the promise of future income tax cuts.

“There’s just the budget reality,” Brownback said. “I think it’s coming across to people that you’ve got to get your resource package somewhere. The budget doesn’t work without the tax piece of it.”

The Senate approved tax legislation embracing Brownback’s proposals to keep the sales tax at its current rate while guaranteeing cuts in individual income tax rates over the next four years. The top rate would drop for 2017 to 3.5 percent from 4.9 percent.

The House passed a tax plan that allows the sales tax to drop and cuts income tax rates less aggressively. The House plan would decrease personal income tax rates each year if overall state revenues grew more than 2 percent. The top rate for 2017 would be 4.88 percent, according to legislative researchers.