Kansas Senate Democrats said Friday they will roll out a tax proposal next week that will include raising the income tax to help balance the state budget.
Minority Leader Anthony Hensley said that the plan will also include raising the state sales tax. Gov. Mark Parkinson offered that idea during his state of the state address in January. Democrats are looking at increasing the tax rates for the highest-earning residents.
"We haven't signed off on anything," said Hensley, of Topeka. "It's not across the board. We haven't reached a threshold, but it won't be a general income tax increase for most Kansans."
He would not say how much money the proposals would raise, but any package would have to have significant increases to close the projected gap between what the state must spend and what revenue it has available for the fiscal year starting July 1.
"I'm not willing to put an exact figure to it," Hensley said.
Lawmakers have reviewed and debated various sales tax proposals this session, including repealing some exemptions. But no measure has earned enough votes.
Legislators will know with more clarity how Kansas revenue collections are doing after a panel of economists meet to make their next estimate on April 16. That figure will be the basis for further budget deliberations.
"I think there's fear out there that after consensus revenue estimates come back that the gap could grow beyond $500 million. We have to see what number is going to be," said House Minority Leader Paul Davis, a Lawrence Democrat.
Senate Republican leaders have gone on record saying they would support raising taxes to close a projected $364 million hole in the state budget for 2011.
Hensley says if Democrats are willing to vote for a sales tax that Republicans have to at least consider raising income taxes. Democrats want to use the additional revenues to restore proposed cuts in the Senate's draft budget for social services, health care and programs for the elderly.
Senate Ways and Means Committee Chairman Jay Emler, a Lindsborg Republican, questioned whether the additional income taxes would be collected quickly enough.
"I don't think it provides the immediate solution we need," he said. "We need to be taking in revenue as quickly as possible."
Emler agrees that the budget gap could be $500 million.
Hensley added, "I think we're going to be faced with a much more serious deficit than that."
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