Senate Committee Endorses Governor’s Proposed Revenue Package, Resistance in House
Since the opening gavel just over a month ago, the most pressing issue of this legislative session has been the nearly $500 million projected two-year shortfall. Essential to Governor Brownback’s budget proposal is an accompanying revenue package proposal. This revenue proposal would make permanent the full 1-cent sales tax passed in 2010, six tenths of which is currently scheduled to expire July 1 (resulting in just over $250 million in additional revenue).
The Governor has also proposed elimination of two state income tax deductions – the state mortgage interest and property tax deductions. By eliminating these deductions in addition to the extension of the sales tax, the Governor projects the budget gap would be filled. On February 12th the Senate Assessment and Taxation Committee endorsed the revenue plan minus elimination of the property tax deduction (valued at around $60 million) forwarding the measure to the full Senate. To date, the House has been reluctant to consider any revenue enhancements. Some legislators are instead suggesting a 7.5% across the board cut to address the projected shortfall (including funding for all levels of education). Such action would likely mean a cut in funding of more than $2.5 million to PSU.