TOPEKA — Gov. Sam Brownback on Thursday proposed a money-saving $14 billion budget for 2012-13 that he said would be a boon for Kansas businesses and taxpayers.

And since it’s 4 percent less than the current spending plan, it would leave some money in the bank — $465 million.

“If we didn’t learn in this last crisis that an ending balance was important, then we weren’t paying attention,” said Steve Anderson, the state’s budget director. “The budget’s all about fiscal stability, the tax plan is all about economic prosperity, and the two are married.”

A day earlier, Brownback unveiled a sweeping remake of the state’s tax code, slashing rates but also eliminating deductions many Kansans rely on to lower their tax bills. Home mortgage interest payments and contributions to charities, for example, would no longer be deductible.

Low-income Kansans also would lose the earned income tax credit that provides a tax refund even when they don’t owe taxes.

Brownback’s proposed business tax changes would leave more money in the hands of owners with the expectation that they would reinvest in Kansas companies, benefiting the local economy and ultimately the state’s tax collections.

“This is one of the avenues that we can have a direct and powerful impact, a meaningful increase in the pocketbook of every Kansan across the state,” Lt. Gov. Jeff Colyer told lawmakers during a joint meeting of tax committees from the Senate and House.

Critics, however, are complaining that the measures, if adopted, could hurt children, the poor and homeowners.

Statehouse Democrats already have targeted Brownback’s plans to eliminate the home mortgage interest deduction. They have cautioned about the prospects of less affluent Kansans picking up the costs of running government.

“We need tax fairness,” said House Minority Leader Paul Davis of Lawrence. “If we’re going to be shifting the burden of funding government from wealthy taxpayers, corporations and businesses onto working Kansans, that is wrong.”

Ends mortgage break

Under Brownback’s proposal, Kansas taxpayers would see lower tax rates.

The tax plan, developed with the help of conservative economist Arthur Laffer, moves the state from three individual income tax brackets to two. Laffer, the architect of President Ronald Reagan’s supply side economic policies, is expected to be in the Capitol next week to discuss Brownback’s plan.

It would reduce the upper-level tax bracket to 4.9 percent for taxpayers earning more than $15,000 individually and $30,000 for a married couple filing jointly. The current rate for anyone earning more than $15,000 ranges from 6.25 percent to 6.45 percent.

The lowest tax bracket for taxpayers making less than $15,000 would drop to 3 percent from 3.5 percent.

But the governor’s plan, which is billed as “revenue neutral,” relies on eliminating roughly two dozen tax breaks, including the deductions for home interest mortgage and charitable contributions.

The home interest deduction saves taxpayers on average $389 a year, while the charitable contribution donation saves an average of $243 a year.

The administration argues that deductions will mean less as the income tax decreases.

State officials also said only about a quarter of Kansas taxpayers itemize deductions, including about 159,000 taxpayers in Johnson and Wyandotte counties. The others claim the standard deduction.