Feb 22 (Reuters) - The Kansas House on Wednesday overrode Republican Governor Sam Brownback’s veto of a bipartisan bill aimed at filling holes in the state’s leaky budget by rolling back tax cuts he had championed.
The 85-40 vote came just two hours after the governor’s action on the measure, which would raise individual income tax rates and end a business tax exemption to raise an additional $590 million in fiscal 2018, which begins on July 1. The Senate must still vote on an override.
Brownback said on Tuesday night that he planned to veto it “because the legislature failed to fulfill my request that they find savings and efficiencies before asking the people of Kansas for more taxes.”
Kansas is not the only state with Republicans controlling both the governor’s office and legislature to have skirmishes over taxes.
Michigan Governor Rick Snyder has pushed back against a legislative move to phase out the state’s income tax by 2057. On Tuesday, House lawmakers revised the proposal to gradually reduce the rate from 4.25 percent to 3.90 percent in 2021, when it would result in a $1.1 billion drop in revenue, according to a legislative analysis.
“Half of a billion dollars will come due in 2019 and over one billion by 2022, years in which we have planned funding specifically to invest in modernizing our state’s infrastructure,” Snyder said in a statement.
In Oklahoma, where revenue is sinking, Governor Mary Fallin proposed expanding the sales tax base to services to raise about $834 million for the fiscal 2018 budget.
Lieutenant Governor Todd Lamb, who was elected separately from Fallin, resigned from the governor’s Cabinet last week, citing the tax plan.
“While I respect the determination with which Governor Fallin met her obligation to present a balanced budget to the legislature, I cannot support her proposed tax increases,” Lamb, who remains lieutenant governor, said in a statement.
In Kansas, Brownback enacted legislation in 2012 reducing tax rates by as much as 29 percent in a move intended to improve the state’s business climate.
But state coffers have shrunk, causing Kansas to miss revenue targets. This month, S&P offered a pessimistic assessment on the state’s finances, revising the outlook on Kansas’ AA-minus credit rating to negative from stable, citing structural budget pressures.
“Rome is burning and our constituents expect the fire department to show up,” said Democratic State Representative Adam Lusker during the House override vote.
Reporting by Karen Pierog in Chicago; Editing by Matthew Lewis