Davis – Tax panel begins looking at sales tax exemptions

Editor’s Note: The following is a report by state Rep. Paul Davis, D-Lawrence, on recent action in the Kansas Legislature. Davis was appointed to the Kansas House District 46 seat when former state Rep. Troy Findley left the position to serve as legislative liaison for Gov. Kathleen Sebelius. Davis’ column will be published online throughout the 2003 session of the Legislature.

It has been an interesting week in the Taxation Committee. The committee has begun hearings on the repeal of all sixty-five sales tax exemptions. Instead of introducing sixty-five separate bills, Taxation Committee Chairman John Edmonds has decided to group the exemptions into a series of bills.

The first hearing dealt with the exemption on broadcasting sales and advertising (many have commented on the irony of starting off with the media’s sales tax exemption).

A number of media representatives testified that removing the exemption would put them at a competitive disadvantage with other states and that many businesses would be affected because they would be receiving less for their advertising dollar (the logic behind this argument being that media advertisers would not increase their purchases to offset the sales tax they would now have to pay).

The media representatives were pressed by a number of legislators to tell the committee where they would propose to get the revenue to deal with the state budget shortfall if it wasn’t going to come from the repeal of their exemption.

Most of the conferees tried to duck the question, but a few suggested looking at other tax increases. We also heard from a number of groups regarding the sales tax exemption for medical supplies and equipment. Developmental disability groups told the committee that repeal of the exemption would force many persons with developmental disabilities to pay more money for the equipment and supplies they need and that this would be an undue hardship since many of these persons have had their state assistance payments reduced by budget cuts over the past year. Several Lawrence residents, including Kathy Lobb with the Self-Advocate Coalition of Kansas and Jennifer Schwartz with the Kansas Association of Centers for Independent Living, presented testimony in opposition to the bill.

There has been fairly little activity in the Transportation Committee to-date aside from a number of briefings by the new Secretary of Transportation. We did receive a briefing on trucking safety by the Kansas Motor Carriers Association on Tuesday. Having little background on trucking issues, I was very impressed with the seriousness with which the industry pays attention to safety issues. The industry has adopted many internal procedures targeted at educating their members about safety issues and encouraging them to always make safety their first priority.

A legislator who practices real estate law brought a very important issue to the House Judiciary Committee this week. He has found in his law practice that home inspectors are inserting clauses into the contracts they use when a home buyer or homeowner hires them to perform an inspection that essentially indemnifies the inspector from any liability if he or she commits a negligent act when performing an inspection (i.e. failure to notice a significant foundation problem). These clauses essentially leave the consumer with no recourse if the inspector commits a major error.

The committee members (including myself) were almost outraged by the inspectors’ use of these clauses and will probably take action on a proposal to declare any such clause that appears in an inspection contract to be null and void.

I have been learning a great deal about education issues by serving on a special education task force that the House Democratic Caucus has developed. We have several legislators like Representative Bill Reardon from Kansas City who have worked on education issues for many years and have a wealth of knowledge. Governor Sebelius has recently appointed the members of her education task force, which we hope to work with closely. I have certainly heard many good ideas for making our schools better from the other task force members, but unfortunately many of them cost dollars that we just don’t have right now.

On Tuesday evening, we were joined by about twenty Lawrence business persons for the annual Kansas Chamber of Commerce Legislative Caucus. The event was attended by well over one thousand people and featured a keynote speech by Governor Sebelius. In her speech, the Governor outlined her vision for economic development in Kansas and mentioned the use of our higher education institutions to create research-based jobs. She also talked about using technology to revitalize the rural economy.

As I look to next week, I will be hosting the 2003 Leadership Lawrence Class on Wednesday along with other members of the Lawrence delegation. My contraceptive parity bill will also be heard in the House Insurance Committee on Thursday.