Archive for Friday, February 6, 2004

Business leaders at odds on taxes

Lawrence Chamber, in conflict with state commerce officials, backs Sebelius plan

February 6, 2004


— The Lawrence Chamber of Commerce on Thursday found itself in the middle of a legislative fight over Gov. Kathleen Sebelius' proposal to increase taxes for schools.

Larry McElwain, chairman of the Lawrence chamber, told lawmakers the chamber supported the governor's plan to increase state sales, income and property taxes to pay for a $304 million increase in public school funding over three years.

"The governor's plan offers us a foundation for a rational, tactical approach to solving a huge state problem," he told members of the Senate tax committee, which started two days of hearings on the proposal.

But statewide chamber of commerce officials and those from other areas of Kansas testified against the Sebelius tax plan.

Lew Ebert, president and chief executive of the Kansas Chamber of Commerce, said the Kansas economy was too shaky to absorb a tax increase.

"Now is surely not the time to further burden the citizens of Kansas with more taxes," Ebert said.

The conflicting testimony produced some sparks from lawmakers.

Sen. Ed Pugh, R-Wamego, questioned whether the Lawrence chamber represented businesses, while Sen. Mark Buhler, R-Lawrence, and Democrats on the panel asked the same question of Ebert with the statewide chamber.

Later, the Wichita Area Chamber of Commerce also weighed in against tax increases, saying the city's economic base of airplane manufacturing had been hit hard by the post-9-11 economic slump.

The proposed tax increases "would be damaging to our members as well as the immediate and long-term recovery of the economy in our region," said Bernie Koch, representing the Wichita chamber.

McElwain said shoring up public schools was critical to producing an economic rebound.

Each company that considers moving to Lawrence, McElwain said, asks, "How good is your educational system? What can my family expect to gain from your school system?"

Recent local and legislative proposals to attract more life science research and development demand an extra commitment for higher education and public schools, he said.

Because of revenue shortfalls in recent years, the Lawrence school district has cut $7 million from its budget and is looking at the possibility of cutting another $2.1 million, he said.

"We know that our board is cutting into the meat of our educational system. This cannot continue indefinitely," he said.

McElwain told the tax committee that while no bill or method of school funding was "flawless," the Lawrence chamber still urged lawmakers to address school funding this session.

A state judge has declared the Kansas school finance system unconstitutional because it shortchanges students, especially minorities. Shawnee County District Court Judge Terry Bullock has given the Legislature until July 1 to fix the system. But some lawmakers have said the state should wait until next year to resolve the issue, pending the outcome of an appeal of Bullock's decision to the Kansas Supreme Court.

McElwain's comments seemed to indicate a settling of opinion by the Lawrence chamber. Last month, the chamber said a survey of its members showed support for higher state sales, cigarette, liquor and fuel taxes for education. But days later, the chamber backtracked, saying its position was that lawmakers should focus on fixing the school funding formula and then decide whether additional revenue was needed.

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