Revenue from the state’s 6.3% sales tax, which is slated to drop to 5.7% on July 1, might be needed if the state loses its appeal in a school funding lawsuit, Gov. Sam Brownback said last week.
Kansas was ordered by a Shawnee County District Court in January to increase local aid to education by $440 million a year. That ruling has been appealed to the state Supreme Court and is currently under mediation.
“We’ve got a lawsuit pending against the state right now that we have lost at the lower court on K-12 funding, and we don’t know when the Supreme Court is going to rule,” the GOP Brownback said. “I think you have got to also be also looking at that in the overall picture.”
If the appeal is lost, Brownback said, budget writers would have to provide additional revenue for public education.
“You could get yourself where you’d be in a crisis position, and I don’t think that’s prudent,” he said. Ending the tax on time also could result in significant funding cuts for higher education, he added.
Brownback favors keeping the 6.3% rate indefinitely. The rate was raised from 5.3% in 2010 as revenues from income and sales taxes slumped in the recession. The rate was scheduled to drop to 5.7% in fiscal 2014, with revenue from the remaining 0.3% increase being dedicated to transportation projects.
The House has unanimously rejected a Senate budget plan that called for retaining the sales tax rate at 6.3%. The House budget would allow the rate to drop to 5.7% in fiscal 2014 as planned.
Brownback has proposed a five-year tax plan that wound generate $685 million, most of it coming from extending the current sales tax rate with some tax credits being eliminated.