Alternative tax sources should be investigated to fund increased state spending on public education.
Gov. Bill Graves is traveling the state this week trying to drum up support for his plan to raise the state sales and gasoline taxes to provide more funding for public schools.
Giving more money to schools isn't a hard sell. Even the idea of raising taxes to accomplish that goal is gaining acceptance. The biggest point of contention seems to be what taxes should be raised.
The governor proposes raising the state sales tax from 4.9 cents to 5.1 cents and adding 2 cents per gallon to the motor fuels tax. The increases would produce $112 million for the public schools budget and allow an increase of $110 in the state's per-pupil aid.
While many Kansans support additional funds for public schools, they find increases in the sales and motor fuels taxes particularly painful. Increases in those taxes affect everyone in the state who eats or drives. That spreads the expense of the tax fairly equally across all income brackets, placing approximately the same burden on low-income people as on higher-income residents. Experience also has taught us that increases in these taxes are basically permanent. Sales taxes go up from time to time, but they never go down.
That's why some alternative sources of revenue are tempting. On Sunday, the Journal-World reported on a state audit that revealed a tax loophole that was inadvertently opened when the Kansas Legislature gave insurance companies a tax break in 1997. The Legislative Division of Post Audit reported that the loophole associated with premium taxes paid by insurance companies may have cost the state tens of millions of dollars since it was passed. The Post Audit report suggested that "armed with better cost data, the Legislature may want to revisit the premium tax law and the level of tax cuts it granted."
It's natural to wonder whether other loopholes were opened during the tax-cutting frenzy of the late 1990s. Although some legislators contend that the premium tax is working exactly as legislators intended, others are wondering whether tweaking this law and others might create significant new revenue to contribute to public schools without placing more burden on sales taxes and motor fuel taxes.
This is a possibility that deserves exploration.
During a stop in Emporia Tuesday, Graves invited legislators willing to support substantial action on public education spending to share their ideas. "If your idea adds votes, I want to talk," Graves said.
Probably no idea would add more votes than a proposal to raise school funding without raising sales and motor fuels taxes. The governor has some good ideas about how to spend additional public school funds, but his plans on how to raise that money deserve another look. A more creative approach and perhaps an effort to correct some tax oversights may produce a better funding plan for Kansas taxpayers.
No comments
Commenting is turned off for this story.