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Kan. governor says he likes direction of tax talks

Published on -4/26/2012, 4:41 PM

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TOPEKA, Kan. (AP) -- Gov. Sam Brownback said Thursday that he's pleased with the direction Kansas legislators are going in negotiating tax cuts because they're incorporating core elements of his plan for reducing income taxes.

The compromise emerging from talks between the House and Senate is likely to cut individual income tax rates and phase out income taxes for 191,000 partnerships, sole proprietorships and other businesses. Brownback is pushing the reduction in rates and the tax break for businesses, which he says will create economic growth.

The three senators and three House members involved in negotiations must reconcile differences between the two chambers, which jettisoned other parts of Brownback's plan. Neither embraced his call to eliminate a tax credit for poor workers or popular income tax deductions for charitable contributions and interest paid on home mortgages.

As lawmakers prepared for a second consecutive day of talks Thursday, each chamber's lead negotiator hoped the discussions would wrap up this week, allowing a vote on a tax package next week. Their compromise also is likely to cut the state's sales tax to 5.7 percent in July 2013 from its current 6.3 percent and give additional state aid to cities and counties to keep their local property taxes in check.

Brownback's plan didn't include either the sales tax reduction or a property tax provision, and he told The Associated Press on Thursday that legislators still must be careful not to create future budget problems.

"The core of it to me is getting the tax off of small business and getting the overall rates down," Brownback said. "If we can get that core, then, you know, I think you can do a lot around that core."

But more than 40 former Republican legislators are criticizing the push by the GOP governor and the GOP-controlled Legislature to cut income taxes.

They argued during a news conference Wednesday that lawmakers are likely to shift the tax burden from the wealthy to the poor and leave public schools without adequate funds. They warned that the tax cuts could mean "a looming crisis for our children's education," a concern Democrats also have expressed.

"This is truly a moral crisis for our state," former state Rep. Rochelle Chronister, of Neodesha, said during the ex-legislators' news conference. "Asking the poorest to pay more and the richest to pay less is unfair."

But Brownback said the state has stabilized its budget. When he took office in January 2011, the state faced a projected shortfall approaching $500 million, while now, surplus cash reserves, absent a tax plan, could approach $600 million by the end of June 2013.

"We've had a billion-dollar swing in this state in a year," Brownback said. "The economy's growing. We've been more fiscally prudent, and so we're now in a position where we can do some policy changes."

Brownback's plan would have reduced state revenues by about $90 million during the fiscal year beginning July 1. Both chambers approved much larger cuts, and negotiators have acknowledged that the compromise will have to move back toward the size of Brownback's package.

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Online:

Kansas governor: https://governor.ks.gov

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

John Hanna can be reached at www.twitter.com/apjdhanna

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