Kansas tax talks in hands of gov., top GOP leaders

TOPEKA, Kan. (AP) -- Republican Gov. Sam Brownback was negotiating directly with the Kansas Legislature's top GOP leaders to end an impasse over additional tax cuts as lawmakers reconvened Wednesday to begin wrapping up business for the year.

Brownback and Republican legislative leaders want to follow up on massive personal income tax cuts enacted last year by further reducing rates. But they also must stabilize the state budget, and the governor has proposed canceling a decrease in the state's sales tax scheduled by law for July.

The governor, Senate President Susan Wagle of Wichita, and House Speaker Ray Merrick of Stilwell confirmed they met Tuesday to discuss tax issues and expect to continue talks. All three said it's too early to predict the outlines of a compromise.

"Your tax plan has to match your budget," Brownback told The Associated Press in a brief interview. "I'm looking at everything."

The Senate has approved Brownback's proposed income tax cuts and his plan to keep the sales tax at 6.3 percent. The House passed legislation to let the sales tax drop to 5.7 percent in July as planned, with less aggressive income tax cuts.

GOP leaders assigned three senators and three House members to draft a compromise, but they made little progress before lawmakers began their annual spring break last month. Those negotiators set a meeting for Tuesday but canceled it and have yet to reschedule.

Democrats' leaders, Sen. Anthony Hensley of Topeka and Rep. Paul Davis of Lawrence, continue to describe last year's income tax cuts as reckless and Brownback's sales tax proposal this year as unfair to the poor. They acknowledged during a news conference Tuesday that their strategy is to keep up the criticism and hope it resonates with voters in 2014.

Hensley said he hadn't expected to be included in the talks with Brownback, Merrick and Wagle.

And Rep. Tom Sawyer of Wichita, the ranking Democrat on the House Taxation Committee, said: "Until they're willing to undo the horrible tax mess from last year, no Democrat is going to be voting for this garbage."

It's not unusual for the governor and top legislative leaders to temporarily take over negotiations on the big issues as lawmakers' annual session nears its end. Republican leaders had wanted the Legislature to finish its work by early next week, but Wagle told fellow GOP senators during a caucus that resolving tax issues could take longer.

And Brownback and legislators must resolve tax issues to finish work on a proposed state budget of roughly $14.5 billion for the fiscal year beginning July 1. The governor had described canceling the sales tax decrease as crucial to his goal of preventing cuts in state funding for higher education, and spokeswoman Sherriene Jones-Sontag said he's not backing away from that budget recommendation.

Merrick and other GOP leaders in the House had said their chamber would insist upon decreasing the sales tax as planned. Before lawmakers began their spring break, the House voted unanimously against the Senate's tax legislation.

Legislators boosted the sales tax in 2010 to help balance the budget, promising most of the increase would be temporary. Many legislators in both parties want to keep the promise.

But on Wednesday, Merrick said, "Anything is possible."

Most GOP senators are willing to cancel the sales tax decrease because they believe cutting personal income taxes further will stimulate the state's economy.

The Senate's legislation, like Brownback's proposals, would guarantee additional cuts in personal income tax rates during the next four years. The House plan would drop rates only after overall state revenues grew more than 2 percent.

"We're regularly meeting," Wagle said. "I'm sensing that there is a desire to resolve our differences."

___

The House tax plan is House Sub for SB 84. The Senate plan is contained in HB 2059.

___

Online:

Kansas Legislature: http://www.kslegislature.org

___

Follow John Hanna on Twitter at www.twitter.com/apjdhanna