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Archive for Tuesday, January 22, 1991

S BUDGET PROPOSAL

January 22, 1991

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— Rep. Betty Jo Charlton, D-Lawrence, let out a little "wow" when told of the size of Gov. Joan Finney's proposed increase in state sales tax revenues.

But Charlton, who along with other local lawmakers was contacted Monday following a press briefing on Finney's budget proposal, quickly added, "We need it."

Finney's budget plan would increase the state's general fund revenues a whopping $410.4 million during the 1992 fiscal year and more than $600 million in succeeding years. To raise that much money, 35 exemptions to the state sales tax would be eliminated and 77 services would be subject to the sales tax for the first time.

Local representatives heard Finney's initial budget proposal for the first time during a speech this morning to both chambers of the Legislature.

REP. JOHN Solbach, D-Lawrence, called Finney's proposal "a bold stroke."

"She's not pussy-footing around," he said. "I think she's telling us the truth. She's telling us that kind of a bold move is necessary."

Under Finney's proposal, the majority of new money raised will be used for a massive property tax relief plan. The proposal would send $286.5 million back to schools and local governments in fiscal year 1992, which begins July 1, to decrease property taxes 24 percent. Another $440.3 million would be sent in succeeding fiscal years to decrease property taxes by a total of 35 percent.

The budget proposal also would provide an additional $50.4 million for the Department of Social and Rehabilitation Services, $23.8 million for Board of Regent's base adjustments and for completion of the Margin of Excellence program, and $30.6 million for maintenance of state employee pay.

Both Charlton and Solbach said Finney's budget proposal is a starting point, which the Legislature will scutinize. Most likely, they said, the governor's budget will not be adopted as presented.

SEN. WINT Winter Jr., R-Lawrence, had a split reaction to the proposal.

Winter said the state's general fund, which provides money for education, prison and social service programs, is "badly broken" and needs the additional revenue as proposed by Finney. He added that eliminating some sales tax exemptions would be the first place to look for that revenue, followed by imposing the sales taxes on some services.

But Winter, who said he would approach the governor's proposal with an open mind, nonetheless said the massive amounts of new sales tax revenue for property tax reductions in Finney's proposal probably is a mistake.

"I'm not so positive about raising other taxes to decrease property taxes," he said.

Both Winter and Rep. Sandy Praeger, R-Lawrence, said the problem of high property taxes in Kansas should be fixed through changes in the classification amendment, under which taxation rates are set for different classes of property. Combined with reappraisal of property, classification resulted in a major shift in the property tax load during the 1989 tax year in Kansas.

"THE REASON we have a property tax problem is not because other taxes are too low but because the classification amendment is flawed," Winter said. "We should solve the problem primarily by changing the (state) Constitution and by looking to local government to be much more tight-fisted."

Praeger said Finney's budget depicts well the problems facing Kansas state government this year, and she said she agreed with some goals outlined including money for the Margin of Excellence.

But she said, "There's a lot of questions to be answered. Raising one tax to lower another doesn't make a lot of sense."

Charlton said the Legislature will study other proposals, including changing the classification amendment to make property taxes more fair. And she indicated that increasing income tax rates for those in upper-level income brackets may be one part of the solution.

"I THINK IF we raise that much revenue this year, it will not come from just broadening the sales tax base," she said.

Solbach emphasized that any budget presented is a political document.

"And no governor's proposal is ever adopted hook, line and sinker," he said.

"What she's done here is raise the ire and the objections of every special interest group and many lobbyists in the state," he added. "They'll be crying foul, saying it's unfair. And in many cases, what they tell us will be true.

"But this will force the Legislature to either come up with alternatives or do away with the programs she proposes to fund. The Legislature cannot sit back and say the governor failed to identify the problems and failed to identify a solution," Solbach added.

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