TOPEKA — Top House and Senate Republicans in the Legislature sharply challenged Friday accuracy of Gov. Sam Brownback administration’s depiction of state income tax reforms adopted in response to the government’s substantial revenue shortfall.
Senate President Susan Wagle, R-Wichita, and House Speaker Ron Ryckman, R-Olathe, joined with colleagues on the State Finance Council to push back against rhetoric from Brownback and Sam Williams, secretary of the Kansas Department of Revenue, which have been echoed by other members of the administration, that the Legislature approved record tax increases rather than control spending and went on a $200 million spending spree.
“I think these statements that have been coming out of the governor’s office are extremely inappropriate and do not reflect the work of the Legislature,” Wagle said.
Ryckman said Brownback and members of the administration improperly asserted in news releases and opinion pieces that the Legislature burned through “every dime” of the two-year, $1.2 billion increase in taxes enacted after overriding a veto by Brownback.
In fact, the governor’s budget director, Shawn Sullivan, told council members in response to questions that reform of Kansas tax law would raise annual revenue to the state by approximately $600 million in the upcoming fiscal year and result in an ending balance of at least $134 million.
“We have to go back to the validity, the accuracy, of the numbers,” Ryckman said. “You say every dime has been spent.”
Melika Willoughby, chief spokeswoman for Brownback, said in an email message to Kansans that legislators were spreading a bogus narrative that higher taxes were necessary to fill a two-year $900 million revenue gap and to dump more cash into K-12 education following a Kansas Supreme Court ruling.
“That’s simply false,” Willoughby said. “They chose to spend brand new dollars, more than $200 million, on a legislative wish list.”
Senate Minority Leader Jim Denning, R-Overland Park, said Brownback administration officials were “picking and choosing numbers” to mislead Kansans.
“I wouldn’t agree with that,” Sullivan said.
Sen. Laura Kelly, a Topeka Democrat on the Senate budget committee, said new revenue went into erasing the deficit, improving state employee salaries, upgrading mental health services and other long-neglected areas of the state budget. She expressed surprise at the tone of the Brownback administration’s response to tax legislation approved by the Republican-led Legislature.
“It’s certainly disrespectful, at least, and unbecoming the office of the governor,” Kelly said.
Kansas struggled to keep its budget balanced since Republican legislators in 2012 eliminated the income tax on owners of 330,000 businesses and reduced individual income tax rates in a bid to stimulate the economy, create new jobs and draw people to Kansas. The 2017 Legislature repealed the business owner exemption, implemented a higher upper-income tax bracket and raised rates across the board.
Brownback, who chairs the nine-member council and presided over the meeting by speakerphone, said his preference would have been to preserve his “pro-growth income tax policy” and tread water long enough for job expansion and business activity to deliver higher tax revenue.
He vetoed the first tax-hike bill sent to his desk in the 2017 session, but the House and Senate overrode his second veto on taxes.
“I’ve made my opinions known about what I don’t think we should be doing on tax policy,” said Brownback, who is prohibited from seeking re-election in 2018. “We’re trying to have a discussion with the state. And that’s going to continue.”
Brownback said evidence showed the Kansas economy was on the upswing and election of President Donald Trump marked rebirth of business activity.
“If we had just had normal economic growth the prior two years, we wouldn’t be in the budget situation we are today,” Brownback said. “It’s been a difficult couple years for the Kansas economy.”
House Majority Leader Don Hineman, a Dighton Republican, said the flawed budget plan presented by Brownback in January was based on one-time sources of money, sale of assets, delayed state payments and escalating borrowing.
“That’s really a sign of desperation,” Hineman said. “It means your fiscal house is in such disarray that you’re starting to shut down. That was the option you gave us in January. The Legislature rejected that as too much of a short-term fix that could not be sustainable.”
The council adopted a resolution authorizing $27 million in raises for classified and unclassified state employees. Workers on the job since 2012 who haven’t had a raise in five years would get a 5-percent boost. Those with less experience or work in the judicial branch would get a 2.5-percent raise. Approximately 17,600 of the state’s 41,000 employees will be eligible for raises.
Council members approved a request from Sullivan to borrow $900 million from an idle-funds account to cover expenditures when cash-flow fluctuations in the new fiscal year left the state without enough in the general fund to operate. Internal borrowing has been relied upon since 2000, and the amount of each certificate of indebtedness has served as a benchmark of the state’s financial well-being.
In 2016, the council authorized a record $900 million to cover expenses during a fiscal year that ended Friday. The line of credit in 2015 was $840 million, and in 2014 the figure was $675 million.