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TOPEKA — Senate leaders today said a combination of tax increases and spending cuts would be the best way to balance the state budget.

Senate President Steve Morris, R-Hugoton, said he thought a plan to close sales tax exemptions and increase the tobacco tax could win legislative approval as lawmakers try to close a projected $400 million budget gap.

Senate Vice President John Vratil, R-Leawood, said balancing the budget solely with more spending cuts would be "catastrophic."

Little room to maneuver

Lawmakers have cut about $1 billion in state spending over the past two years and it was made clear today that key legislators, like the governor, have concluded that another round of reductions would be worse than tax increases.

House GOP leaders at the beginning of the session said they didn't see need or support for tax increases as proposed by the governor and the Senate leaders on Friday said they had not discussed their views on the budget problem with their House counterparts.

"It's not unusual for us to have a disagreement with the House," Morris said during the Friday morning sit-down with news reporters that he usually schedules during the legislative session.

Morris said education and Medicaid spending account for most of the state budget those areas have already been cut as much as possible without violating federal restrictions that accompanied last year's federal economic stimulus aid.

"So there's 85 percent of the budget sort of off the table right off the bat," Morris said.

Trying to cut $400 million out of the remaining 15 percent of state services, "is just not fair," he said.

Morris said a general sales tax increase as proposed by the governor would "be a tough sale," but that he thought a plan to close sales tax exemptions could be passed.

"Realistically, looking at a package of sales tax exemptions is a logical place to start. The secretary of revenue has presented a package that I think is reasonable," he said.

The plan presented to lawmakers last week by Revenue Secretary Joan Wagnon would raise about $200 million a year mostly by eliminating the current sales tax exemption on residential utilities.

"Systemic overspending"

Wade Hapgood, a spokesman for House Republican leaders, said tax increases in a weak economy are a bad idea and that the real problem is overspending.

"Trying to tax our way out of a recession has been proven not to work," Hapgood said. "Balancing the budget on the back of the taxpayers while doing nothing to stop the systemic overspending in government is irresponsible."

Hapgood said "what the proponents of tax increases are failing to realize is this is not just about raising taxes...This is about substantive policy changes that will allow for a sustainable budget for years to come."

Closing the $400 million budget gap with taxes, cuts or a combination of both would still leave the state with little or no reserves and budget officials have warned that state revenues could continue to decline with no sure end to the recession yet in sight.

The state is entering its fourth consecutive year of declining revenues, something budget officials say has never happened before in Kansas history.