Prospects for a stand-pat state budget darkened over the weekend. State tax collections in April dropped $65 million below the expected level, lifting the estimated 2011 deficit by that much. The new numbers meant that the Senate Ways and Means plan no longer would do the job.
The Senate committee had proposed a one-cent increase in the state sales tax, a 55-cents-a-pack increase in the cigarette tax, four-fold tax increases on other tobacco products and repeal of a tax break on corporations. The combination would have raised enough to keep school funding level, maintain funding for the disabled and other social services and provide additional funding for the Kansas Department of Transportation to allow a new 10-year construction and maintenance program to get underway.
Friday night’s April report sent committee members back to their calculators.
But Senate Majority Leader, Derek Schmidt of Independence, made the most practical suggestion: “My instinct at this point is that we just have to start voting,” he said.
IT HAD BEEN calculated that a coalition of moderate Republicans and Democrats would support the Senate’s package, that Gov. Mark Parkinson would sign the bill and the session could come to close amid prayers for a better 2011.
April’s disappointment, the number crunchers said, was caused by lower than expected personal in-come tax payments on 2009 income. Last year was a bummer; the recession was still hammering business profits. Next year should be better if the recovery continues and picks up steam. But next year’s taxes can’t be used to fund the 2011 budget.
The lawmakers must pass a balanced budget and the budget can be balanced only with a larger tax package or still more budget reductions.
For the past four months Gov. Parkinson has argued that more budget cuts would be irreponsible. Taxes should be increased, he said in his opening address to the 2010 session. Republican leaders in the Senate have agreed. While the ultra-conservative House leadership still backs a no-tax-increase budget that would require school districts to raise property taxes or slash budgets, vote-counters think there are enough moderates and Democrats in the House to pass the Senate budget plan.
The April bombshell muddies the picture.
To clear it up, House and Senate leaders should go along with Sen. Schmidt’s prescription: just start voting. Open debate on the Senate committee’s plan, see if amendments that will lift the budget above the new minimum level can pass.
— Senate Democrats want to raise the state income tax on those who earn more than $200,000 a year. Fine.
— Maybe lawmakers can agree to raise the cigarette tax by $1 instead of the 55-cents in the Senate package — and make the cancer and heart societies smile.
— The Senate Highway Committee’s highway plan would use some of the general sales tax increase. It would make good sense to fund highways with highway fuels taxes and save the sales tax for the general fund.
— There are exemptions to the sales tax and property tax that could be lifted.
— One tax break given to business and industry is slated for repeal, perhaps others could keep it company.
AS SEN. SCHMIDT suggests, it is better to start voting; to start testing the water to find out what combination of tax hikes can be put together that will win majorities and escape a veto.
Failure to pass a balanced budget for 2011 isn’t an option.
So far as I know, no one in Topeka wants to shut the state of Kansas down and turn off the lights.
