Dust settles on tax plan

Some cuts may still be necessary, Graves says

? Despite approval of nearly $300 million in new taxes, Gov. Bill Graves said Friday he still may have to cut state spending.

And Graves voiced displeasure with the congressional redistricting map the Legislature sent him in the last hours of the 2002 Legislature because it places Junction City in the 1st Congressional District, separate from nearby Fort Riley, which would stay in the 2nd District.

“I don’t know what I am going to do” about the map, Graves said. “I’m going to leave my options open.” The map also splits Lawrence between the 2nd and 3rd districts, but Graves has said that division doesn’t bother him.

Lawmakers about 4 a.m. Friday wrapped up a record-long 106-day legislative session after having approved increases in state sales, cigarette, motor fuels and inheritance taxes to shore up the budget and highway-building program.

The House approved the compromise tax bill, 63-59, breaking a session-long impasse in that chamber. The Senate’s 23-15 vote followed, and it sent the measure to Graves.

The governor praised supporters of the tax increases. “This improves the picture dramatically. It’s a package I can certainly live with,” he said.

Missing estimates

But during a news conference, Graves told reporters the $4.4 billion budget for the fiscal year starting July 1 remained tight and could get tighter because revenues flowing into state coffers are below estimates.

Graves said he could not rule out possible cuts.

“We’ve got to decide whether what we did gets us by or not, and if the conclusion is that it’s not going to get us by, we have to take some action,” he said. “I’ll be telling everybody unofficially they better be squeezing every penny they can every chance they get.”

Legislation approved early Friday morning would increase the sales tax to 5.3 percent on July 1 from its current 4.9 percent and impose that tax on customized computer software.

A tax of up to 15 percent would be imposed on property inherited by nephews, nieces and nonrelatives. The cigarette tax would increase by 46 cents a pack on July 1, to 70 cents, then another 9 cents, to 79 cents, on Jan. 1. The fees corporations pay to do business in Kansas would double.

Offsetting those increases would be breaks for businesses and a 50 percent increase in income-tax credits for poor, working families.

Public schools

The tax increase means public schools dodged a budget bullet. The package includes a $20-per-pupil increase in the state’s payments to school districts. School officials had been prepared for no increase in state aid.

“Given all that everybody’s been through, that’s obviously good news,” said Lawrence Supt. Randy Weseman. “I know the Legislature is going to get it from both sides some will say they shouldn’t have raised taxes, others will say they should have done more for schools but for me, things being the way they were, this is a good compromise.”

Weseman said that to avoid spending cuts in the coming school year, the Lawrence district needed an additional $1.5 million. The state aid is based on the number of students enrolled. Because of declining enrollment, Weseman said, it appears the district despite the boost in state aid is only in line for only an additional $39,000.

“It’s our hope that we can now begin the process of reallocation,” Weseman said.

Social services

But if the revenue package includes a slight increase for public schools, that means part a big part, perhaps of any remaining state budget shortfall is likely to hit social services. Some legislative analysts anticipate a $50 million gap in the budget.

“That $50 million has to come from somewhere,” said Bob Mikesic, advocacy coordinator at Independence Inc., a Lawrence-based program for those with physical disabilities.

“And with things being the way they are, that would indicate additional cuts” for social services, he said. “We’re definitely concerned about that.”

There’s already a five-month waiting list for services for people with physical disabilities, Mikesic said.

For the state’s frail elderly, the waiting list for in-home services is now at six months.

“All we know at this point is that if revenue streams decline, there will be cuts in spending,” said Maria Russo, director of Jayhawk Area Agency on Aging. “And a lot of times, those cuts end up in social services. So we’re not out of the woods yet. We’re still holding our breath.”

At Cottonwood Inc., a program that provides services for the developmentally disabled in Douglas County, Peggy Wallert is wondering what it takes to get legislators’ attention.

“The waiting list wasn’t funded and nothing was done about the rate crisis we’re in we still can’t pay our direct care staff enough to hold on to them,” she said. “These issues aren’t going to go away.”

Lawsuit threat

Last month, Interhab, a state association representing the state’s community programs for the developmentally disabled, threatened to sue the state if rates weren’t increased.

Such a lawsuit would raise the possibility of a judge ordering the state to raise rates paid to community programs.

“We made it pretty clear that if they (legislators) didn’t do anything, we’d see them in court,” said Interhab executive director Tom Laing. “They didn’t do anything, so, hey, the die is cast.”

Graves, a Republican, said that even if he could end his term in January without having to cut programs, the next governor and Legislature in 2003 would face significant budget problems because the proposal passed by lawmakers depends on many one-time fund sources.

In the Senate, of the 30 Republicans, 21 voted yes and 9 voted no. Of the 10 Democrats, 2 voted yes, 6 voted no, and 2 did not vote. Sandy Praeger, R-Lawrence, voted in favor.

In the House, of the 79 Republicans, 55 voted yes, 22 voted no, and 2 did not vote. Of the 46 Democrats, 8 voted yes, 37 voted no, and 1 did not vote. Voting in favor were Tom Sloan, R-Lawrence; Lee Tafanelli, R-Ozawkie; Ralph Tanner, R-Baldwin; Barbara Ballard, D-Lawrence; and Troy Findley, D-Lawrence.