An agreement among Kansas legislators on cutting income taxes appears to be unraveling.
Senate President Steve Morris, a moderate Hugoton Republican, said Thursday he doesn't like the plan because he sees it as too aggressive and believes it could lead to future budget problems.
Conservative Republicans in the Kansas House grumbled Thursday that the proposal drafted by House and Senate negotiators is not aggressive enough. It reduces individual income tax rates and phases out income taxes for 191,000 businesses.
The House kept the process moving forward late Thursday afternoon by voting 66-49 to suspend a rule requiring all negotiators to sign off a compromise proposal. The Senate must approve the same motion to keep the compromise alive.
Democrats don't like the proposal, fearing it will lead to budget cuts.
However supporters, including Governor Sam Brownback, say the proposed tax plan will save money and create jobs. But opponents worry it could lead to massive budget shortfalls.
Among other things, House Substitute for Senate Bill 177, will split Kansans into a two tiered tax bracket, for those making more or less than $15,000. If you're making less than $15,000 a year, your tax rate will be 3 percent. For those making more than that, the tax rate will be 5.5 percent for the tax year 2013-2014, and will decrease each year until it reaches 4.9 percent in 2018.
It will repeal 16 personal tax credits. Those are:
-Abandoned well plugging
-Alternative fuel equipment expenditures
-Child day care expenses
-Disabled access expenditures
-Environmental compliance expenditures
-Law enforcement training center contributions
-National Guard health insurance expenditures
-Swine facility improvement expenditures
-Research and development expenditures
-Port authority contributions
-Small employer health benefit plan contributions
-Telecommunications property tax payments
-Venture capital contributions
-Certain assistance to family contributors
It might sound like the proposed plan will do more harm than good. But supporters of the tax plan say it will pay off in spades in the long term, because it will also lower the corporate tax rate. Governor Brownback said he will sign the bill if it's passed.
"It will create a general environment where our economy will grow and that will create jobs," said Chairman of the Wichita Chamber Walter Berry.
"If we want to be in charge of our own destiny, we have to be intentional about it and that is to look at our tax structure and see where we're competitive and see what we can do about it."
Opponents say the plan will be detrimental to the state because it won't provide enough revenue to fund things like education. But supporters say it will attract more businesses, which will employ more people.