The Associated Press
TOPEKA, Kan. — A key state senator proposed Monday that Kansas increase taxes about $350 million — and raise the cost of soda, beer, cigarettes and other goods — to eliminate its projected budget shortfall.
Chairman Les Donovan outlined his proposals during a meeting of his Senate Assessment and Taxation Committee, after members heard testimony from business lobbyists opposed to increasing the state’s sales tax. Despite that criticism, the Wichita Republican’s package includes a sales tax increase.
The committee’s meeting began what will be a busy legislative week on tax and budget issues.
The House was set to debate tax issues Tuesday, when hundreds of teachers, parents and students planned to rally against further cuts in education funding. Donovan’s committee expects to vote on tax issues this week, and the Senate is supposed to debate a $13.8 billion budget for the fiscal year beginning July 1.
Democratic Gov. Mark Parkinson and the Republican-controlled Legislature must eliminate a projected $467 million budget shortfall for the next fiscal year.
“I think they have studied the budgets carefully, and they’ve realized there aren’t responsible areas that we can cut anymore,” Parkinson told reporters Monday.
But business groups, including the Kansas Chamber of Commerce, argue raising taxes will stall any economic recovery. While leading Republican senators like Donovan are working on tax proposals, House GOP leaders adamantly oppose them.
“Tax increases are a shortsighted approach to solving the Kansas budget and will only put the state at a competitive disadvantage in the region,” said House Majority Leader Ray Merrick, a Stilwell Republican.
Still, legislators are under pressure from educators and advocates for the poor and needy to raise taxes to avoid big spending cuts.
Parkinson has proposed increasing the state’s sales tax from 5.3 percent to 6.3 percent for three years.
As an alternative, Donovan proposed a permanent increase in the sales tax, making it 6 percent. But, under his plan, food would be exempt from the tax starting in July 2013.
The governor also proposed increasing the state’s cigarette tax by 55 cents a pack, to $1.34, and raising the tax on other tobacco products from 10 percent to 40 percent. Donovan proposes to raise the cigarette tax by 25 cents a pack, to $1.04, and the tax on other tobacco products, to 20 percent.
Donovan’s committee has a hearing scheduled Tuesday on a bill increasing taxes on beer, wine and liquor, and his package includes a scaled-back version of that measure.
Another bill before his committee — to be heard Wednesday — would impose a new tax on soda and other sugary drinks. It would be a penny for every teaspoon of sugar, increasing the cost of a 12-ounce can of soda by 10 cents.
Donovan’s alternative is a tax of fourth-tenths of 1 cent per teaspoon of sugar.
“It just means that we’re coming up with a spot to start from,” Donovan said.
The proposed budget senators will consider later this week would require tax increases to sustain its spending.
Meanwhile, the tax bill before the House would raise about $170 million during the next fiscal year.
Most of the new revenues would come from imposing the sales tax on residential water, electric and natural gas bills, which have been exempt since 1979. Churches also would lose a sales tax exemption for the goods they purchase.
