The Latest: Kansas governor, top Democrat spar over taxes

AP News
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Posted: Apr 20, 2016 7:42 PM

TOPEKA, Kan. (AP) — The Latest on Kansas' new fiscal forecast (all times local):

6:45 p.m.

Republican Gov. Sam Brownback says it would not be useful for Kansas legislators to debate raising taxes in looking for ways to balance the budget.

But Kansas Senate Democratic Leader Anthony Hensley of Topeka said Wednesday that the governor is in "denial" about the failure of his tax policies.

The GOP-dominated Legislature slashed personal income taxes in 2012 and 2013 at Brownback's urging to stimulate the economy.

But a growing number of Republican lawmakers want to reverse a key policy that exempted 330,000 farmers and business owners from personal income taxes. Hensley also supports the move.

Brownback Budget Director Shawn Sullivan said the policy has helped the economy.

But the state has struggled to balance its budget since and a new fiscal forecast Wednesday reduced projected revenues through June 2017.

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6:30 p.m.

Republican Gov. Sam Brownback is pushing for higher spending for the state's troubled mental hospital in offering proposals to cut elsewhere to help balance the budget.

Budget Director Shawn Sullivan said Wednesday that the governor is proposing an additional $17 million in spending over the next 15 months at Osawatomie State Hospital in eastern Kansas and Larned State Hospital in western Kansas.

The proposals contrasted with plans announced by Sullivan to delay highway projects and cut spending at state universities to help balance the budget following new, more pessimistic revenue projections.

But the state has been trying for months to boost staffing at the hospitals.

The federal government decertified Osawatomie in December over the reported rape of an employee by a patient in October and other safety issues.

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6:15 p.m.

Kansas Gov. Sam Brownback plans to delay major highway projects and make cuts to funding for state universities to help balance the state's budget.

Budget Director Shawn Sullivan announced those actions Wednesday and other proposals for legislators to consider in filling budget shortfalls through June 2017.

The governor also proposed selling off the rights to collect part of the state's portion of a national legal settlement with tobacco companies to get a one-time infusion of $158 million to help balance the budget.

As alternatives to the tobacco-money plan, Sullivan proposed either delaying contributions to public employee pensions or making $139 million in spending cuts that would include a reduction in aid to public schools.

Sullivan announced the budget measures after a new fiscal forecast for state government slashed projected tax collections.

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4:50 p.m.

The top Republican in the Kansas House says there's much good news in the state's economy despite a new fiscal forecast that slashed projected revenues.

House Speaker Ray Merrick pointed Wednesday to the state's low unemployment rate of 3.9 percent in March and said businesses are adding jobs.

Merrick said that even with the lower revenue projections issued Wednesday, the state would see tax collections increase fiscal year over year.

The Stilwell Republican said in a statement that lawmakers would work to keep the budget balanced with what he called "a broad, clear-headed view of the actual situation."

The fiscal forecast issued by state officials and university economists reduced projections for state tax collections through June 2017 by a total of $348 million.

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4 p.m.

A new fiscal forecast for Kansas has slashed the state's projected tax collections by $348 million for the current and next fiscal years.

The new forecast drafted Wednesday would leave the state with budget shortfalls totaling more than $290 million.

The figures were included in documents prepared by legislative researchers ahead of a Wednesday evening Statehouse news conference and obtained by The Associated Press from another source.

The forecasters reduced the projection for total tax collections for the current fiscal year by $177 million, or 2.9 percent, to about $5.86 billion.

They also cut the estimate for the next fiscal year that begins in July by nearly $171 million, or 2.7 percent, to $6.04 billion.

Gov. Sam Brownback's budget director planned to outline budget-balancing proposals during the news conference.

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3 p.m.

Kansas legislators are bracing for bad fiscal news and proposals from Republican Gov. Sam Brownback for keeping the state's next budget balanced.

State officials, legislative researchers and university economists met Wednesday to draft revised projections for tax collections through June 2017.

The new forecast was being released Wednesday evening during a Statehouse news conference and was expected to be more pessimistic than the current one issued in November. Tax collections have fallen short of expectations 11 of the past 12 months.

Budget Director Shawn Sullivan was expected to outline budget measures during the same news conference.

The Kansas House and Senate budget committees were scheduled to meet Thursday to review the governor's proposals. The full Legislature returns next week from its annual spring break to tackle budget issues.

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12:45 a.m.

Kansas officials will make a new fiscal forecast for state government Wednesday.

Kansas has struggled to balance its budget since the GOP-dominated Legislature slashed personal income taxes in 2012 and 2013 at Brownback's urging to stimulate the economy. The promised job growth hasn't arrived, and a growing number of disillusioned Republicans want to reverse a key policy — an income tax exemption for more than 330,000 farmers and business owners — to address the state's budget woes.

The governor has so far rejected the idea and blames sluggishness in the state's economy on national slumps in agriculture, energy production and aircraft manufacturing.

The state's tax collections for the current fiscal year have fallen $81 million, or 1.9 percent, short of expectations.

If the new revenue forecast is more pessimistic, the state also could have a projected deficit in its $16 billion budget for the next fiscal year, which begins July 1.