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TOPEKA — Kansas Revenue Secretary Joan Wagnon on Wednesday once again preached the benefits of closing sales tax exemptions to help solve the state’s budget crisis.

This time she wasn’t preaching to the choir.

Wagnon addressed a morning meeting of the House Republican caucus, a group that for the most part never saw a tax it liked or an exemption it didn’t.

House Speaker Mike O’Neal, a Hutchinson Republican, said Wagnon’s talk underscored what he called “a basic philosophical difference” between Democrats and Republicans.

Democrats, he said, believe revenues belong to the government and that government gets to decide what is returned to the people.

Republicans, he said, believe money belongs to the people and they should decide how much goes to the government.

O’Neal said he and Wagnon had agreed to respect each other’s philosophical differences. Though few caucus members seemed to side with Wagnon, the 40-minute session was cool but cordial.

Wagnon has long pushed to close the long list of sales tax exemptions, of which there are dozens. As a member of the Kansas House in the 1990s, she unsuccessfully carried a bill on the floor that would have repealed most of them.

But instead, the list of exemptions has grown over time.

In a typical legislative session a couple more get added, generally to accommodate some charitable organization active in some legislator’s district.

Wagnon told the caucus members that if they couldn’t agree to repeal any exemptions at least they should consider not adding new ones.

“Because we keep saying yes,” she said, “the policy is pretty much ask and ye shall receive. Our primary recommendation is no more — a moratorium for three years. Let’s let the system catch up and analyze.”

The exemptions range from large to small.

For example, the sale of farm animals is exempt and that means the state will forego collecting about $170 million over the next year, according to revenue department estimates.

There is no sales tax charged for the meals or drinks restaurants sell to their own employees, which means about $4 million a year the state won’t collect.

Churches and many other non-profit groups are exempt from paying sales taxes.

“I’m a church-goer,” Wagnon told the caucus. “My church does good work and I contribute but that’s not to say we shouldn’t pay sales tax. We should. Let’s not narrow the tax base anymore than we already have.”

With lawmakers facing a $400 million budget shortfall, Wagnon has been promoting the idea of closing many of the exemptions, saying it could bring an extra $200 million a year to the state treasury while providing more consistency and fairness to the tax code.

She said she will ask for bills to be introduced on Thursday that were developed by the Kansas Advisory Council on Intergovernmental Relations, a 15-member group comprised of county, city, and township officials and local school board members. Wagnon is the chairwoman.

One of the bills, she said, would include repealing the exemption on residential utilities, raising an estimated $146 million a year.

She told the caucus that since 1978 residential utilities have been exempt even though they are subject to local sales taxes.

The state, she said, is shortchanging itself.

Another bill, she said, would require nonprofit groups including churches to pay sales tax.

Wagnon said while no one expects churches to pay income tax on collections or property taxes on their parsonages, there is no reason to exempt them from paying sales tax on purchases.

She said that exemption was a subsidy for churches and asked how many in the room thought churches warranted it. Without hesitation four or five said they did.

Afterward the meeting, O’Neal said Republicans were not opposed to reviewing exemptions granted in the past.

“If we’ve passed exemptions or credits to someone we knew was going to spend that money in Missouri or put it in a tin can and bury it in their backyard, then shame on us,” he said. “That is not good policy.

“But what I think we’ll find is that most of these exemptions were granted to stimulate a group or an entity to do good things and to re-invest in the community,” he said. “Our expectation is that for every dollar of tax relief we’ve given out over the years, we’ve gotten more than a dollar back.”

O’Neal said he doubted that many of Wagnon’s proposals would pass.

House Taxation Committee Chairman Richard Carlson, R-St. Marys, said ending the exemption on residential utilities would be “a tough sell. I’m interested in hearing the testimony on that one.”

Rep. Arlen Siegfried, R-Olathe, announced that he would introduce a bill to create a 10-legislator tax commission to solicit public input on ways to eliminate some of the exemptions.

“The idea would be to find a way to reduce exemptions while at the same time reducing tax rates in a commensurate manner so that overall there’s not a tax increase on the citizens of Kansas,” Siegfried said.

Afterward, Wagnon said the legislation proposed by the Kansas Advisory Council on Intergovernmental Relations’ is separate from the three-year, one-cent sale tax increased proposed earlier this week by Gov. Mark Parkinson.

“People think that because I’m chairing KACIR, I’m running the governor’s traps. But I’m not,” Wagnon said. “But he’s not opposed to this. He doesn’t care how the revenue gets raised as long as the budget doesn’t get cut any further — that’s his bottom line.”