Republicans in Kansas, facing a $400 million budget hole due to tax cuts pushed by Gov. Sam Brownback, are now finally considering raising taxes to compensate for the shortfall.
Legislators are considering rolling back an exemption on nonwage income for small businesses they passed a few years ago and replacing it with a 1 percent tax credit. The reductions in rates on income taxes they passed will remain untouched. Some Republicans are also considering raising the sales tax on everything but food, though sales taxes increases are generally considered to impact the poor the most.
But it’s debatable if the revenue streams they are considering will even work. One bill they have on the table would only raise an estimated $30 million in revenue, falling far short of what the state needs.
Since Kansas embarked on its “tea party experiment,” the state has faced severe budget shortages. They collected nearly $6 million less than expected in tax revenue — stemming mainly from a drop in sales tax revenue — this month adding on to an ongoing shortfall, and the legislature has gone into an extended session trying to figure out how to either cut spending or raise revenue to balance the budget.
Brownback told the legislature that he would unveil a tax plan Friday, but he abruptly canceled his appearance, leaving the legislature to debate the budget into the weekend. Ironically, each additional day they spend in session costs them an additional $40,000.
While the legislature is refusing to consider raising taxes through increasing rates on income, they have been busy cutting programs, particularly in education and for the poor. They recently enacted a law that would limit welfare beneficiaries to only withdrawing $25 a day. Cuts have been so severe to education that a waitress recently rejected a tip from Brownback, telling him to “tip the schools” instead.
“It’s very difficult for conservative leaders to vote for a tax increase,” said Republican Senate President Susan Wagle.
Update:
The $6 million figure has been placed in context.