State Rundown 5/11: Deadlock and Infighting

Kansas lawmakers continue to clash with Gov. Sam Brownback over the efficacy of his tax break on business pass-through income, this time in the House. State Rep. Mark Hutton says the measure was passed to boost the economy, and that the record shows the tax cut hasn’t paid off. His concerns echo those of Senate Pres. Susan Wagle, who pointed out that her constituents are concerned the tax break isn’t fair, since owners of businesses can avoid income taxes while their employees cannot. The Chair of the House Taxation Committee, Rep. Marvin Kleeb, has stated that lawmakers never intended that small business owners would have no income tax liability, and that changes should be considered. Meanwhile, public schools in the state continue to cut programs and shed jobs, and legislators hold out hope the governor will present a coherent strategy for dealing with the budget shortfall.

The budget negotiations in Minnesota continue, though lawmakers have reached the last full week of the regular legislative session. After Gov. Mark Dayton released his budget proposal, Conservative lawmakers in the House passed over $2 billion in unwise tax cuts. Gov. Dayton expressed his willingness to consider the House’s personal income tax exemption and a some additional exemptions for Social Security income, but held firm on his opposition to proposed business tax cuts, calling them a bait-and-switch: “You put out the favorable item, in this case middle-income tax cuts,” Dayton argued, “and then you switch that to eliminating the estate tax on millionaires and billionaires and then permanent business property tax relief that goes on and on after the middle-income tax cut falls away.” The governor, meanwhile, called for permanent investments in education in his budget, including $343 million for universal pre-kindergarten that the House and Senate budget proposals did not include. Some legislators, like Senate Majority Leader Tom Bakk, want to tie agreement on any tax cut proposals to a transportation package that raises new revenue for road construction and maintenance.

Following Up:
South Carolina: Political observers in the Palmetto State feel that Gov. Nikki Haley’s hard-line stance on road funding could prove costly. Some legislators have grumbled that the governor’s transportation plan is unrealistic and that she should work with lawmakers instead of demonizing them.

Nebraska: State senators passed a six cent increase in the state’s gasoline tax, which Gov. Pete Ricketts vetoed immediately. The gas tax bill passed just four votes shy of a veto-proof majority, and its sponsors say they are confident they can override the governor’s veto since eight senators didn’t vote at all. Gov. Ricketts wants the legislature to give his newly-appointed roads director time to come up with an alternative.

States Ending Session This Week:
Missouri (Friday)