Brownback: Despite Sales Tax Hike, It’s ‘Not Accurate’ That We’re Raising Taxes

UPDATE: June 17, 2015, 10:09 AM EDT

TOPEKA, Kan. (AP) — Republican Gov. Sam Brownback said Tuesday that Kansas isn’t really increasing taxes even though the state will raise its sales and cigarette taxes to balance the budget.

Only hours after defending the legislation during a Statehouse news conference, Brownback announced he had signed two bills that together raise $384 million during the fiscal year that begins July 1, to avert a deficit. The state’s sales tax will rise to 6.5 percent from 6.15 percent, and the cigarette tax will jump by 50 cents a pack, to $1.29.

The governor said this year’s tax increases must be viewed in light of aggressive personal income tax cuts enacted by the GOP-dominated Legislature at his urging in 2012 and 2013 to stimulate the economy. His aides distributed figures showing that those income tax cuts would be worth nearly $1 billion during the next fiscal year.

The state’s budget problems arose after those income tax cuts, and disagreements among Republican legislators over closing the deficit made this year’s annual session the longest in state history, at 113 days. Brownback said while some critics “would have you believe” the state is raising taxes, “that is not accurate.”

“You’ve got to look at the totality of the picture,” he told reporters. “When you look at that, it is a tax cut, and you’ve dealt with your major problems in state government.”

Brownback, his top aides and their legislative allies have argued repeatedly that cuts in income tax rates benefited all classes of taxpayers. The governor noted that one provision of this year’s tax legislation will exempt 388,000 low-income Kansans, starting in 2016.

But a new analysis Tuesday from Institute for Taxation and Economic Policy, a nonpartisan but left-leaning policy group based in Washington, said the cumulative effects of the changes in tax policy since 2012 have benefited the state’s wealthiest residents the most, while increasing taxes for its poorest residents.

The analysis posted online said the poorest 20 percent of the state’s residents will pay 1.5 percent more in taxes than they did in 2012, or an average of $197 a year. Meanwhile, the wealthiest 1 percent will pay 1.9 percent less, or an average of about $24,600, the group said.

Senate Minority Leader Anthony Hensley said this year’s tax increases show that the governor’s economic policies are a failure and predicted that that the state will continue to experience “a self-inflicted budget crisis for years to come.”

“Governor Brownback is incapable of telling the truth,” Hensley, a Topeka Democrat, said in a statement. “Not only is this a tax increase, it is the largest tax increase in state history.”

Brownback also announced that he signed a bill containing the bulk of the state’s $15.4 billion budget for the next fiscal year, vetoing a single, $1.9 million higher education item that the state Board of Regents said wasn’t necessary.

Republican legislators who drafted the tax legislation anticipate that Brownback might have to cut another $50 million in spending to ensure that the state has a cushion of cash reserves going into July 2016. Brownback said he his administration would look for efficiencies.

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Online:

Summary of first tax bill: http://bit.ly/1F3xHBu

Summary of the second bill, which modifies the first: http://bit.ly/1KOuw7V

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