By Gene Meyer
March 2, 2010

(KansasReporter) TOPEKA, Kan. - Kansas House Taxation Committee members reluctantly voted Tuesday to raise $169 million in new taxes by requiring homeowners and renters to a pay 5.3 percent sales tax on their water, electric and natural gas bills that are now tax-exempt.

The amended House Bill 2549 also would require churches to pay sales tax on things they buy, but committee members stripped out provisions that would have taken away the same exemptions for other nonprofit organizations and charities.

"Many of these non profits are suffering from the same business and economic conditions as we are," said state Rep. Arlen Siegfreid, an Olathe Republican who proposed restoring the exemptions to those nonprofits.

Committee members also made the unusual move of voting to send the bill to the full House for debate without an accomanying recommendation for its passage there.

The package is part of a much larger set of sales tax exemption repeals proposed by state revenue officials that were the center of six days of committee hearings last month.

That in part is why many committee members who are believed to oppose repealing the tax exemptions apparently declined to kill the proposal in committee, said the committee's chairman, state Rep. Richard Carlson, a St. Mary's Republican.

"When we've held hearings for six days on a proposal, more than 23 people deserve to discuss it," Carlson said.

Both backers and opponents say the bill faces uncertain prospects in the House, where many majority GOP members oppose tax increases of any kind.

A panel of state and local government budget executives headed by state Revenue Secretary Joan Wagnon originally proposed wiping out a total of $194 million in sales tax exemptions previously granted consumers - who otherwise would pay more than $146 million in utility bill sales taxes - and to charities, service organizations and others who play a variety of public service roles in their communties.

Backers of the repeals argued that a proliferation of exemptions given to applicants in the last several years has severely eroded Kansas' tax base and that some of the exemptions gave beneficiaries an unfair business advantage over for-profit competitors.

Opponents of the repeals countered that many of the organizations receiving the exemptions needed them to continue providing a wide variety of social services that Kansas taxpayers would have to pick up the tab for otherwise.