Politics & Government

Prospects weak for Kansas bill to tax churches, lottery tickets

TOPEKA, Kan. — Legislation to impose a sales tax on utility bills, churches and lottery tickets is headed to a debate and vote in the Kansas House.

That could be its final resting place, as even supporters of the legislation predict it will be a tough sell with the 125-member House, all up for re-election in November.

Another clue that this tax bill is in trouble: The House Tax Committee today kicked out the bill — without recommendation. That's a tactic used frequently on legislation that, while perhaps unpopular, is seen as important enough to debate.

The bill would impose the state's 5.3 percent sales tax on power, gas and water bills. It would also remove a sales tax exemption enjoyed by churches and some particular business transactions. Lottery tickets would be taxed, raising their price and threatening the state's ability to participate in multi-state drawings.

Right now the state exempts 96 specific groups or types of business transactions from the state's sales tax. Those exemptions add up to more than $4 billion. Lawmakers eager to avoid deeper cuts to schools and other state services suggested the repeal of some of these breaks to help eliminate a nearly $500 million deficit.

The bill that left House Tax Committee Tuesday would raise $169 million a year.

The Committee removed a provision repealing the sales tax exemption for non-profit organizations and for home repairs.

Churches opposed the bill, as did anyone else who stood to lose their sales tax exemption. The tax on lottery tickets is a unique issue: in order to participate in multi-state games, Kansas agrees to set its lottery ticket price at a certain level. By adding a tax to the price of a lottery ticket, the state would no longer be allowed to participate, and could lose tens of millions in revenue even as it seeks to raise new money.

Tax Committee Chairman Richard Carlson, a St. Marys Republican, himself opposes the bill. But he said it's important all 125 House members get to weigh in.

House Speaker Mike O'Neal said Tuesday that the full House will debate and vote on the bill, perhaps next week.

"It ought to be talked about," said the Hutchinson Republican. "We shouldn't stifle this kind of debate."

But O'Neal doesn't expect many in the House will be eager to vote to tax churches or raise every citizen's utility bills.

"My prediction is that there won't be any appetite for it," he said.