TOPEKA — Sometime next week, Senate Democrats will offer a budget plan that includes raising the income tax to offset some of the FY 2011 budget shortfall.
Senate Minority Leader Anthony Hensley said Friday that the budget may include restoring cuts made to SRS and the Department on Aging.
“We feel like the Budget Committee went too far on cutting those agencies,” Hensley said.
He said that the income tax hike would be included for higher-income Kansans. He said that the threshold is still being discussed.
“We would not raise the rates for a vast majority of working class Kansans,” Hensley said. “We feel like the income tax has not been discussed enough.”
Kansas Gov. Mark Parkinson, a Democrat, proposed a one-cent sales tax increase for the next three years. That proposal has been defeated by both the House and the Senate.
“Historically, Democrats have felt that an sales tax has been regressive and impacts harder on lower-income Kansans,” Hensley said. “That is why we feel an income tax is more progressive and should be part of the discussion.”
During the 2010 session, lawmakers have discussed various sales tax proposals, but none of those — including repealing some exemptions — have been successful in earning enough votes for passage.
Some feel that it may be too soon to discuss budget plans. On Thursday, House Minority Leader Paul Davis said that Congress is in the midst of debating a 70-30 split on Medicaid reimbursements to the state. Currently, that split is 60-40. If Congress passed the increase, Davis said that would bring in an additional $130 million to the state, but Hensley said that is something that cannot be counted.
“We can't bank on that which is a mistake that House Republicans have made,” Hensley said. “It is not a guarantee. We hope that Congress will extend the match, but we can't bank on it.”
On top of the Medicaid payment debate, Kansas lawmakers have also said that, with revenue projections expected to be updated on April 16, any budget proposed this early takes the risk of having to be augmented.
“In discussions we've had in Senate Republicans, we have decided to hold off until the veto session,” Hensley said. “We have to have a clearer picture on what those projections will be and that is unprecedented. It is wiser to wait now.”
One last piece concerns an augmentation to expanded gaming. The Senate is expected to debate a bill that lowers expected investments for a state-run destination casino in the Southeast Gaming Zone (Cherokee and Crawford counties) as well as lowers revenue collections for slot machines at race tracks.
“That is revenue that you just can't bank on either,” Hensley said. “I hope that we can move on the gaming issue, especially as it relates to southeast Kansas, but we really can't count on that either.”