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Feb 23, 4:35 PM EST

Kansas lawmakers move toward votes on governor's tax plan



TOPEKA, Kan. (AP) -- Kansas legislators advanced Gov. Sam Brownback's plan to boost liquor and cigarette taxes even though they don't think his proposals have much support, restarting a debate Thursday over balancing the budget after he vetoed income tax increases.

The Republican-led House and Senate tax committees forwarded separate bills containing the GOP governor's proposals to their chambers for debate, without formally endorsing them. Each chamber could debate the measures early next month.

Each bill also contains Brownback's proposals to raise annual business filing fees and to restore personal income taxes on so-called passive earnings such as rent and royalties. His plan would raise $393 million over two years, starting in July.

But the state faces projected budget shortfalls totaling nearly $1.1 billion through June 2019. The bill Brownback vetoed would have increased income taxes to raise more than $1 billion over two years. He called it "punitive" and has proposed internal government borrowing and other accounting moves to tide the state over.

"We need to talk about his plan and let everybody share their concerns publicly about his proposals," said Senate President Susan Wagle, a Wichita Republican.

Kansas has struggled to balance its budget since GOP legislators slashed personal income taxes at Brownback's urging in 2012 and 2013. Even some Republicans concluded the tax-cutting experiment was a bust as an economic stimulus, and voters last year ousted two dozen of Brownback's allies from the Legislature, giving Democrats and GOP moderates more power.

The bill Brownback vetoed Wednesday would have rolled back his signature policies, boosting income tax rates and ending an exemption for more than 330,000 farmers and business owners. The House voted 85-40 to override the veto, but the Senate vote was 24-16, three short of the necessary two-thirds majority.

The governor's budget-balancing plan also includes internal government borrowing, scaling back contributions to public employees' pensions, the diversion of funds from highway projects and other accounting moves to tide the state over. Those measures are moving separately from his proposed tax and fee increases.

House Taxation Committee Chairman Steven Johnson, an Assaria Republican, acknowledged that lawmakers often do not resolve tax and budget issues until late in the spring but, "I would rather that we continue to address sooner rather than later."

Brownback's proposal would increase the state's cigarette tax by $1 a pack, to $2.29. The state would double its liquor enforcement tax - which consumers pay when they buy liquor, wine and beer - to 16 percent.

The governor argues that raising income taxes would tax productivity and hurt economic growth and that it's better to boost consumption-based taxes, particularly those on optional purchases. But critics of his proposal contend that the costs will be borne the most by poor and working-class families.

"Obviously, leadership, they want to make a public display and put a stake through it," said Sen. Tom Holland, D-Baldwin City. "They'll have fun doing that."

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