Gov. Sam Brownback’s office released a budget proposal Wednesday that is likely to put him at odds with large contingent of the Legislature.
Legislators in both parties won re-election last year on platforms that included repealing a state income tax exemption for business owners and providing a state general fund that balances annual spending with tax revenue and doesn’t rely on one-time sweeps of other money.
The proposal outlined Wednesday by State Budget Director Shawn Sullivan barely alters the tax exemption and does not balance the general fund until 2019.
Sullivan told legislators the tax exemption is a valuable economic development tool and cutting spending to match tax revenues remains unrealistic while the state’s farm and oil industries languish.
Brownback’s budget continues to rely on one-time fixes like sweeps of the highway fund, further deferments of payments to the state employee pension plan and the sale of the Kansas Bioscience Authority.
He also proposes selling the state’s annual payments from a legal settlement against tobacco companies for a lump sum payment. Several legislators have called that a non-starter.
To solve the immediate budget deficit — about $350 million before July 1 — Brownback proposed tapping a long-term investment fund and paying it back over the next seven years.
Legislators want to consider other options.
Key Republicans like Rep. Steven Johnson, chairman of the House Tax Committee, and Senate Majority Leader Jim Denning told the Associated Press they favor a quick repeal of the 2012 income tax exemption, which would net an estimated $260 million in annual tax revenue.