Senate approves a sales tax increase

Here is a legislative update written by Mark Tallman of the Kansas Association of School Boards.  There is some compelling testimony in this article.

Hopefully, we are nearing an end to the session that will not cut K-12 funding any deeper.  Things could happen very quickly in the next day or so.  It is still not a sure thing that a revenue bill will make it through both houses.  So please be vigilant to follow the news.

May 7, 2010

Senate approves sales tax increase


The Kansas Senate voted 23-17 Thursday night to increase the state sales tax by 1 percent per dollar, raising over $300 million in each of the next three years to avoid deeper cuts in education, social services and other state programs. Wednesday, Senators approved Senate Sub for HB 2360, which will help finance the budget. Every Senator who voted for the budget voted for the tax bill; every Senator who voted against the tax increase voted against the budget.

Also Thursday, the Kansas House opened debate on a budget substitute developed by a coalition of House Democrats and moderate Republicans. The alternative budget plan was presented after the House rejected the "no tax increase" plan written by Republican leaders on Tuesday. The alternative plan is similar to the budget bill passed by the Senate, and would also require a $300 million tax increase.

The Senate vote on the tax bill, which also includes increased funding for the state highway fund and increases in the state food sales tax rebate and earned income tax credit, was bi-partisan, with 15 of the 31 Republicans joining eight of the nine Democrats in supporting the plan. Here is the roll call vote on final action for Senate Sub for HB 2360:

On roll call, the vote was: Yeas 23, Nays 17, Present and Passing 0, Absent or Not Voting 0.

Yeas: Brungardt, Emler, Faust-Goudeau, Francisco, Haley, Hensley, Holland, Huntington, Kelly, Kultala, Lee, Marshall, McGinn, Morris, Ostmeyer, Owens, Reitz, Schmidt V, Schodorf, Taddiken, Teichman, Umbarger, Vratil.

Nays: Abrams, Apple, Barnett, Brownlee, Bruce, Colyer, Donovan, Huelskamp, Kelsey, Lynn, Masterson, Petersen, Pilcher-Cook, Pyle, Schmidt D, Steineger, Wagle.

The vote capped hours of debate and amendments, including speeches from opponents, who argued raising taxes will damage the state's economic recovery and impose a new burden on struggling families, and supporters who said it is needed to maintain the state's long-term investment in education and infrastructure, and to preserve a safety net of social programs for those same families.

Perhaps the most passionate speech of the night was an explanation of the vote by perhaps the most surprising "yes," vote: Sen. Ralph Ostmeyer, R-Grinnell. He said he was breaking his long-standing opposition to any tax increase and disappointing his conservative colleagues because increased state revenue is the only way to maintain schools in his rural district, and because long-time supporters urged his support of increasing taxes. Despite saying the vote could be his "political death warrant" and ensure an opponent in the next election, he asked for permission to add his vote as a "yes" after the roll was initially closed and his vote was not necessary to pass the bill. Another somewhat surprising vote was Sen. David Haley, D-Kansas City, who said he was casting the first tax increase vote of his Senate career.

The dramatic Senate vote does not guarantee a quick end to the session, however. The House must first determine whether it has the votes to pass a bill requiring revenue and the tax plan to fund it. Those votes could come as early as today, and are expected to be extremely close. Because the Senate placed its tax package in a House bill, the House could simply vote to concur in Senate amendments. If the House passes a budget, the normal procedure would be to resolve differences in a conference committee. However, if the two budgets are "close enough," either chamber could agree to the bill passed by the other without a conference. Last year, the House concurred in the final budget and revenue bills passed by the Senate.

What You Can Do:

The most important thing school leaders can do today is to send a message of thanks to Senators who voted for the tax increase for education and other programs in the face of strong, well-financed opposition. Second, please continue to urge House members to pass a budget that keeps school funding at least at current levels, and pass a revenue bill similar to the Senate plan that provides on-going, dependable funding for that budget. A link to your legislator is available here.

However, both the Senate budget and House alternative contain revenue assumptions that may not materialize, and leave no ending balances or reserves. Even under these proposals, further reductions in state aid for schools are possible. School leaders should keep that in mind when adopting their own budget plans and determining how much money to keep in reserves or cash balances.

Mark Tallman