Kansas legislators Tuesday night repudiated the tax-cutting experiment that brought Gov. Sam Brownback national attention, with even fellow Republicans voting to override his veto of a plan reversing many of the income tax reductions he's championed in recent years as a way to fix the cash-strapped state's budget.
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The state will increase its personal income-tax rates and end an exemption for more than 330,000 farmers and business owners. Legislators expect the changes to raise $1.2 billion in new revenue over two years to close projected budget shortfalls totaling $889 million through June 2019 and provide additional funds for public schools.
The conservative Republican governor still touts the income tax cuts enacted in 2012 and 2013 as pro-growth policies. But voters soured last year on the governor's policies, ousting two dozen of his allies from the Legislature and giving more power to Democrats and moderate Republicans who then backed this year's tax increase. The Legislature's action leaves his main political legacy in tatters.
"He believes -- still believes -- in this, and that's OK. I don't," said Senate Majority Leader Jim Denning, a conservative Kansas City-area Republican who supported the first round of tax cuts in 2012 but voted to override the veto. "I've made many, many bad decisions in my business career, as many bad as good, but I've always backed up and mopped up my mess. That's what I'm doing now."
The Senate's vote to override was 27-13, exactly the two-thirds majority required. The vote in the House was 88-31, giving supporters of the bill four votes more than a two-thirds majority.
When lawmakers passed the bill early Tuesday morning, supporters were short of two-thirds majorities in both chambers. But they had been confident they could pick up additional votes because disagreements about taxes caused the Legislature's annual session to drag out. Lawmakers met Tuesday for the 109th day of what was supposed to be a 100-day session, making this year's one of the longest in state history.
Had the effort to override the veto failed, legislators would have had to start over on a new tax plan, with prospects of working into next week. Legislative leaders were waiting to finish work on the next state budget until tax issues were resolved, and Mr. Brownback's administration had said that lawmakers need to pass a budget by June 17 for most state employees to continue getting paid after the new fiscal year begins in July.
"Let's get our work done," said Rep. Larry Hibbard, a moderate southeast Kansas Republican. "Let's put this Capitol in the rearview mirror."
Under the new tax laws, Kansas will return to having a third tax income-tax rate for its wealthiest filers, something cuts in 2012 eliminated. The top rate will be 5.7%, as opposed to 4.6% now.
The governor endorsed less aggressive income tax increases and proposed raising cigarette and liquor taxes and annual filing fees for for-profit businesses. But his proposals wouldn't have raised enough money to cover the spending increases for schools contemplated by lawmakers.
"We can and we must balance our budget without negatively harming Kansas families," Mr. Brownback said in his short veto message Tuesday afternoon.
The tax increase was designed to also cover extra aid to the state's 286 local public school districts because the state Supreme Court ruled in March that education funding is inadequate. The state spends about $4 billion a year on its schools and lawmakers passed a plan Monday night to phase in a $293 million increase in education funding over two years.
Mr. Brownback's remaining legislative allies, like him, suggested that the tax increase will ruin the economy, and they argued that Kansas has done little to control its spending -- a point many Democrats and GOP moderates disputed.
"This level of taxation is wholly unnecessary," said Sen. Ty Masterson, a Wichita-area conservative Republican. "What we're doing is fleecing our constituents."
Copyright 2017 the Associated Press
(END) Dow Jones Newswires
June 07, 2017 09:32 ET (13:32 GMT)