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Originally published May 17, 2012 at 6:39 p.m., updated May 18, 2012 at 10:25 a.m.
TOPEKA The state budget director today urged House GOP members to consider supporting an alternate tax plan crafted by House and Senate negotiators, saying lawmakers now have "two beautiful options" to choose between.
"It's kind of like the Miss America contest," said Steve Anderson, speaking on behalf of Gov. Sam Brownback to House Republicans during an afternoon caucus meeting. "You have two beautiful options. But the one I would put the crown on would be the conference committee report."
Legislators already have approved a massive tax-cut package that awaits the governor's signature. But according to projections prepared by the Legislature's research arm, it would put the state budget in the hole between $2.4 billion and $2.9 billion by fiscal 2018, assuming spending on current programs aren't cut dramatically and that tax collections follow historical patterns. The Kansas Constitution requires a balanced budget.
The governor has pledged to sign the big bill, Senate Substitute for House Bill 2117, if lawmakers don't give him an alternate plan, saying "we can make it work."
It remains unclear if he'll get the alternative.
Aides to the governor acknowledged they thought it would be a close vote in the House where several members were elected two years ago with tea party support and the backing of Americans for Prosperity, the state's most active anti-tax group.
AFP and the Kansas Chamber have said they prefer the bigger tax cuts and maybe a dozen or more conservative Republicans are expected to vote against the alternate bill because they also prefer the bigger package. Democrats and moderate Republicans are expected to vote against the alternative because they consider it too much.
During the caucus meeting, several House Republicans challenged Anderson and Tax Committee Chairman Richard Carlson, R-St. Mary's, to explain why bigger tax cuts wouldn't be better for the economy and the state budget.
"There is no way this plan is better," said Rep. Owen Donohoe, R-Shawnee, talking about the new plan written into House Substitute for Senate Bill 177.
Donohoe said a tenet of conservative Republicans was that taxes cannot be cut too much. The alternative bill would signal they no longer believed that less taxes always equals a stronger economy.
"Are we now philosophically saying that's not true?" he said, "that you can cut taxes too much?"
Anderson said one potential benefit of SB 177 is that it would leave the state with projected cash reserves that could be used to help pay off state bonds.
But he may have sent a mixed signal about what the administration wants because as he spoke House staffers distributed four pages of charts Anderson had prepared comparing the two tax-cut options.
The hand-out showed that the bigger plan would generate more jobs, more growth in population, the economy and disposable income than the alternative. The handout mentioned no potential downsides to either plan, nor did it indicate how Anderson had arrived at the numbers.
Several members said they were convinced that the more taxes were cut the more the economy would grow, generating more than projected revenue for the state.
"Republicans know that when you cut taxes dramatically, you increase tax revenues," said Rep. Charlotte O'Hara, an Overland Park Republican.
A few members of the caucus spoke in favor of the smaller alternative.
Rep. Mario Goico, R-Wichita, said he wasn't convinced the bigger tax cut package could produce enough economic growth to meet state budget needs.
"It would require 15 to 20 percent growth," he said. "That's unachievable. I don't think we can achieve that. The most prudent approach is the compromise."
House members later voted 66-49 to consider the alternate, which is scheduled to be voted upon Friday. But some members said they voted in favor of the motion to advance the measure only as a mark of respect for fellow Republicans who wanted an opportunity to vote on the alternative.
The prospects for the compromise bill are even murkier in the Senate.
Senate tax negotiators tried unsuccessfully on Thursday to get another meeting with their House counterparts, saying they wanted to modify the agreement reached Wednesday.
"The Senate asked me to come back in because they weren't happy with our offer and I declined," Carlson said. "This is it."
It wasn't immediately clear if the Senate would even vote on the motion that would allow the compromise to be brought to the floor.
The Legislature, which is scheduled to meet 90 days in even-numbered years, exhausted its 96th day on Thursday. The wrap-up session has become the longest in state history. The House and Senate remained divided on three key issues: the budget, taxes and the redrawing of political boundaries for the upcoming elections.
Some legislators, all of whom serve at the Statehouse part time, have hit the end of their short-term rental agreements, complicating the logistics of their public duty. Some have already started leaving for home or other obligations. And at least two are absent due to illness.
"We are starting to lose people," Carlson said. "Time is running out."
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