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Archive for Wednesday, November 4, 2009

Kansas leaders step back from talk of tax hike to make up budget gap

November 4, 2009

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— State leaders Wednesday appeared to shut the door to a tax increase to contend with the continuing budget crisis.

“Every economist in the world tells you, you don’t raise taxes in a recession,” House Speaker Mike O’Neal, R-Hutchinson, said at a Kansas Bar Association legislative forum.

Even Gov. Mark Parkinson, a Democrat who days earlier said he may propose a tax increase to prevent crippling budget cuts, seemed to be backing off that position.

After speaking to elementary school students about H1N1 flu, Parkinson told the Journal-World that he hoped to get through next year without a state tax increase.

When lawmakers return in January, they will be working on the state budget for fiscal year 2011, which will start July 1, 2010.

“Our hope is to present a budget that doesn’t include any tax increases for (fiscal year) 2011, but in order for that to happen, we need some help on the revenue side,” Parkinson said.

The state has suffered large downturns in tax revenue over the past year, which has produced four rounds of budget cuts. Since the Legislature adjourned in May, the deficit has continued to grow — to approximately $500 million.

Parkinson said part of his calculation on the issue of taxes in the next fiscal year is whether he believes there is a possibility to pass an increase in the Legislature.

“Right now, I don’t have a strong sense either way,” he said of the Legislature’s position.

But without a tax increase, the state will be forced to carve large chunks out of certain areas of government.

State Sen. John Vratil, R-Leawood, explained that under the federal stimulus law, the state could jeopardize stimulus funds if it cuts public school and higher education funding below 2006 levels.

The state is 0.6 of 1 percent above those levels currently, and education makes up two-thirds of the state budget.

That means the projected $500 million deficit must be carved out of one-third of the budget, which would produce cuts in the 25 percent range, Vratil said.

“That is going to be a real magical feat,” he said.

House Democratic Leader Paul Davis of Lawrence said more revenue must be raised, including removing some exemptions to the state sales tax.

“Our tax structure has really become this patchwork of exemptions and credits that groups that come before this Legislature have been granted over time,” Davis said.

He said he feared that basic government services could be jeopardized if more cuts are made.

Budget experts meet today to determine the final revenue estimate for the current fiscal year and make a projection for the next.

Comments

1029 5 years, 1 month ago

Tax hike? Really? See people, this is what liberal Democrats like Parkinson do. Thank the good God that we have Republicans who defend the 2nd Amendment for us so we can in turn defend ourselves against outrageous concepts such as taxes. I am getting sick of taxes. I lifted myself by my bootstraps and worked hard to earn my money. Ain't no way I'm paying more in taxes. This is why patriotic Americans everywhere are throwing teabags around. America will listen.

texburgh 5 years, 1 month ago

O'Neal prefers to put seniors and the disabled out on the streets - let their families and the churches care for them. He is a bag similar to that which I have collected after my dogs have spent a week in my yard. O'Neal will destroy public education because he has always been angry after boasting that the state could never lose a lawsuit and then did. O'Neal (who lives in Lawrence, not his district) is an anti-government extremist.

O'Neal must obey his masters at Koch Industries, Americans for Poverty, and the Kansas Poverty Institute. Yoder has his head so far up O'Neal he can see out his nostrils. Yoder - head of Young Democrats at KU - became a moderate R to win a seat in JoCo, then a right wing R to become a chairman under O'Neal. Yoder has no principles, no moral compass.

Bob_Keeshan 5 years, 1 month ago

The largest economic expansion in the history of the world occurred after not one but two tax increases that happened during a recession.

The state that most consistently ranks at the top of lists of "business friendly" states is Virginia. It was not in that position until after the largest tax increase in the history of that state.

It isn't tax increases that stunt your economy, it is an inefficient and out of date system of levying taxes that stunts your economy. Kansas should look at what Virginia did during the last recession and model sweeping tax policy changes after that.

KEITHMILES05 5 years, 1 month ago

Hey, Parkinson has NO plans to run for re-election. He can do as he damn well wants.

monkeyhawk 5 years, 1 month ago

California is now borrowing from its citizens. Maybe Parkinson would like some of that action.

"California to withhold a bigger chunk of paychecks The amount goes up 10% on Sunday as Sacramento borrows from taxpayers. Technically, it's not an income tax increase: You'll get the money back eventually."

http://www.latimes.com/business/la-fi-state-tax31-2009oct31,0,2028140.story

Phillbert 5 years, 1 month ago

Schools, roads, law enforcement and all the other services government provides aren't free. Teachers don't work for tips. Police officers don't work on commission (and we wouldn't want them to.) Most Kansans recognize that, yet their leaders seem unwilling to listen.

Who they do listen to are the business lobbyists, who have gotten legislators to put in hundreds of tax exemptions and tax breaks, none of which actually help average Kansans or create jobs. All they do is siphon off money to the well-connected and away from real drivers of economic growth, like an educated workforce, safe communities, etc.

If only we had a governor who was willing to use the fact that he's not running for re-election to give some straight talk to the people (and legislators) telling them that you can't cut your way to prosperity. And that we can have a tax system that rewards work, not lobbying skills.

preebo 5 years, 1 month ago

All of this talk about Parkinson needing to work on his resume and preparing for the unemployment line is laughable. He has said on numerous occasions that he has ZERO interest in running for office in 2010, so this has freed him up to be a leader and not bend with the political wind. I for one, find it refreshing when a politician uses up all their political capital with absolute disregard for re-election.

BigDog 5 years, 1 month ago

Parkinson not only is not going to run for Governor .... the man doesn't need to take actions just to improve his resume. The man has built and sold several businesses .... he is independently wealthy and has the business skills that if he so desires a job he will find one with his current resume.

Jimo 5 years, 1 month ago

"Every economist in the world tells you, you don’t raise taxes in a recession"

Actually, what every economist will tell you is that it is particularly painful to pay higher taxes during a recession.

What Mr. O'Neal wants to imply is that raising taxes during a recession (or any other time) is directly harmful to economic growth. That's too simplistic and untrue.

Would that during better economic times, instead of cutting taxes and then cutting them some more, extra revenues had been diverted into a rainy-day fund to pay for the imbalance during recessions between decreased tax revenues and increased spending demands. But that would be good government not ideological government - and we can't have that in Kansas.

MyName 5 years, 1 month ago

The only issue is what is best to get us through this crisis.

Sloganeering and low-brow thinking isn't going to help. The thing that people who are against any tax increase at all seem to forget is that it's alot easier to cut taxes when the economy turns around than it is to rebuild something that got trashed because we couldn't afford the maintenance. Or to reteach a kid math or reading because we had to make do with a series of substitutes. I think we're getting close to that point, especially if things don't turn around some in the next 4 months or so.

Nonannytax 4 years, 9 months ago

Typical politician. Goes straight to the weakest among us and threatens to cut services to them to make the rest of us shy away from opposing his tax hike. Happens every time. Let's spend more time on how fast the budget grew and how. Maybe we can backtrack and get rid of some of the less important expenditures. Why always pick on the least of us? By the way, we are wise to the: Tax on Tobacco, Tax on Liquor, Tax on gaming, and the latest, tax soft drinks. Your kidding right? They couldn't even pass this in CA and they latch on to every do gooder cause. I have a feeling Kansans will respond and give their elected officials a hard spanking if they pursue this.

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