The Kansas Legislature has approved a tax increase to balance the state budget, reversing much of Gov. Sam Brownback’s tax cuts.

And the Legislature is looking at various school finance plans.

On the tax increase, the fate of the measure is now in Brownback’s hands as the state faces a $1 billion revenue shortfall over the next 18 months. 

Both opponents and supporters of Sub. for House Bill 2178 said it would raise the revenue necessary to protect K-12 funding from cuts and get the state back on sound financial footing.

The legislation was approved by bi-partisan coalitions, 22-18 on Friday in the Senate and 76-48 one day earlier in the House.

To try to kill the bill would require a veto from Brownback. His staff said he will study the measure. 

If vetoed, the Legislature would have the opportunity to try to overturn the veto, which would require two-thirds majorities in both chambers. That would be 27 votes in the Senate and 84 votes in the House. Brownback has so far said he wouldn’t sign the bill, but if not vetoed, it could take effect without his signature.

The tax bill would undo many of Brownback’s tax cuts from 2012, which critics say have hurt the state’s economy and put the state budget in constant turmoil. Brownback says the tax cuts have helped increase the number of businesses in Kansas.
The Kansas Department of Revenue estimates the tax measure would raise an additional $590 million in the next fiscal year and approximately $450 million each year after that.
The bill would repeal the exemption of non-wage business income, the so-called LLC loophole. Many legislators won election in November vowing to end the exemption, saying that giving more than 300,000 business owners a tax windfall increased the tax burden on others.

The legislation also would increase personal state income tax rates, instituting a three-bracket system of 2.7 percent, 5.25 percent and 5.45 percent. Current law taxes income at 2.7 percent and 4.6 percent. The measure also allows medical expense deductions for state income tax purposes and does away with the ratchet down of income tax rates to zero. 

And in other business this week, the House approved a budget that would not cut public school funding. HB 2052 now goes to the Senate for consideration.

And the House has held hearings on various school finance plans and HB 2179, which would restore teacher due process procedures. No action has been taken on HB 2179, but House Education Chairman Clay Aurand, R-Belleville, has asked that stakeholders try to come up with a proposal.

School finance plans before the House K-12 Education Budget Committee include HB 2270HB 2345HB 2324HB 2344HB 2346 and HB 2347. The current block grant school finance system expires after this school year and legislators must come up with a new system or extend the block grant. 
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