Senate debates 16 bills to cut taxes

Senators were prepared Wednesday to attempt their own version of the "Sweet 16."

The sport wasn't basketball, but tax cuts, with 16 bills up for debate.

And just as teams have 3-point specialists and gimmick defenses, the bills targeted specific parts of the tax code and designed to spur investment in new businesses and accelerate Kansas' economic growth.

For example, one bill would establish a special tax zone in Johnson County to encourage investment in research companies, giving that county permission to raise its sales or property taxes for construction of new research centers associated with higher education institutions.

The costliest bill to the state would cut the corporate franchise tax by $32.2 million over three years, reducing what businesses pay for the privilege of operating in Kansas, eliminating it altogether for businesses with less than $500,000 in assets.

That bill, sought by Gov. Kathleen Sebelius, also contains a provision exempting Social Security benefits from state income taxes if a senior's household income is $50,000 or less. That exemption would cost Kansas $17.9 million over three years in lost revenue.

The House has approved more aggressive proposals, eliminating the franchise tax over three years and exempting all Social Security benefits, something 27 other states already do.

Senators also were to consider exempting certain expenses associated with rebuilding utility infrastructure damaged by natural disasters from the state sales tax.

House Republican leaders urged senators on Tuesday to act on tax measures. Their target is passing tax cuts worth $60 million during the fiscal year beginning July 1. Senate GOP leaders, fearing possible future budget problems, are proposing $15 million.

The Senate debate came a day after the chamber debated a proposed budget for the next fiscal year. State spending is expected to be about $12.4 billion.

Senators have been loath to debate tax bills, delaying action until drafting a budget was well in hand and the state had a better idea of what it to expect in tax collections over the next 18 months.

So far, the state has collected $83 million more than anticipated for the current fiscal year. The next estimate will be made in early April, while legislators are on their traditional three-week hiatus.

When they return, legislators will debate the final reconciliation budget bill, as well as compromises on the numerous tax packages, and adjourn for the year.

On the Net:

Kansas Legislature: http://www.kslegislature.org