The state budget is in the worst shape it has been in at least 20 years.
State general fund receipts are expected to decrease for the third year in a row, and fiscal experts say that drop will continue for a fourth year.
Some have said that has never happened in state history.
Based on statistics since 1990, it certainly hasn’t.
There have been one-year drop-offs in general fund receipts from previous years, but never for three years or four years.
According to statistics provided by the Kansas Legislative Research Department, state general fund receipts in fiscal year 2007, which started July 1, 2006, were $5.8 billion. That dropped to $5.69 billion in 2008, $5.589 billion in 2009 and a projected $5.3 billion in the current 2010 fiscal year. The projection for 2011 is another drop to $5.17 billion.
That would be a $630 million, or 10.8 percent, decrease in the four years.
Despite four rounds of budget cuts this year, the state is looking at a newly estimated $460 million budget hole in the current fiscal year budget.
Filling that hole will take either more budget cuts, a tax increase or a combination of both.
Advocates for school funding are laying the blame for the current crisis at the feet of Kansas lawmakers who have consistently given business interests what they want in the form of tax cuts, even when they knew more revenue would be needed for classrooms because of court-ordered increases.
Gov. Mark Parkinson recently said two things were needed at the Statehouse, and one of those was for lawmakers who claim to be conservatives to be able to say no to businesses asking for tax cuts. The other was more civility among politicians.
Business interests, however, claim the tax cuts have been good for the Kansas economy by keeping the state business-friendly and competitive with other states. Some of those business interests say it’s increased spending, specifically in education, that has gotten the state cornered budget-wise.
The Kansas Chamber of Commerce, in its legislative priorities, says it will fight to hold the line on taxes and that it supports “fiscally responsible efforts to completely eliminate corporate and individual income taxes to encourage investment, business growth and job expansion in Kansas.”
A memo from the Kansas Legislative Research Department shows that tax cuts supported by business interests over the past four years will cumulatively total $1.135 billion through 2013. Lawmakers were even more generous between 1995 and 2005, with tax cuts totaling $5.8 billion, which included sizable tax cuts for individuals, too.
A 2006 study entitled “Sales Tax Erosion in Kansas,” done for the Kansas Department of Revenue, says that sales tax exclusions and exemptions, which number in the hundreds, total nearly twice the amount of the actual sales tax collections. The study also indicates that extending the sales tax to services would increase sales tax revenues by $500 million.
Comments
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LogicMan (anonymous) says…
"sales tax exclusions and exemptions, which number in the hundreds"
OK, what are they? From biggest to smallest in terms of total potential revenue.
devobrun (anonymous) says…
Drill more oil and gas wells.
Farm more land.
Build more coal fired power plants.
As business is slowly replaced by government, tax revenues decrease. When a profitable business is replaced by a non-profit outfit, income tax goes away.
When the salaries of government employees are taxed at an average of 25% and business average tax rates are 30%, revenues go down.
When business moves to China, tax revenues go down.
Isn't it great that evil business profiteers are being punished for their greed?
jayhawklawrence (anonymous) says…
Strong government support for manufacturing in the US is the only way to get us back on track.
If the government cared, they would have looked at problems facing manufacturers and done something about it.
They did not.
When a guy on drugs sticks his hand in a moving machine and loses a finger and then sues and wins on a packed liberal court and gets $50,000,000 in damages, that is a crime.
These types of crimes don't happen in China where the corporations are stampeding to send our hard fought technology, assets and futures.
When representatives of US manufacturing go to meet with Congress, they have to wait in long long lines to try to get any attention from our astute political leaders. When the investment bankers go to visit Congress, they already have a key to the front door and they know where the cocktail bar is.
AreUNorml (anonymous) says…
1. Legalize cannabis for adult use. This will save millions in costs, while at the same time increasing tax revenue.
2. Cut the salaries, staff & benefits of state lawmakers by 5-10%.
3. Combine rural school districts and courts systems.
WilburM (anonymous) says…
Start over on sales taxes. Get rid of every exemption, tax services, take the tax off food, and lower the basic rate to about 5%. There's basic fairness, great breadth, protection for a basic need, and more revenue. What's not to like? (Except for every interest whining about it not getting its own little tax break -- which add up to hundreds of millions of dollars).
Why should a pair of scissors be taxed, but not a haircut? We're a service economy, and the current tax structure does not take that into account.
merrill (anonymous) says…
In general the Kansas Chamber of Commerce is full of crap.
They know nothing about saving for rainy days.
Of course republicans have proved themselves time and again NOT to be the fiscal responsible giants of our time:
substantial fraud was involved. For example, mortgage companies and banks used deceit to get people to take on mortgages when there was no possibility that the borrowers would be able to meet the payments. Not only was this fraud, but this fraud depended on government authorities ignoring their regulatory responsibilities.
A bubble like the housing bubble can wreak havoc on all of us."
Mortgage Meltdown by Bush admin( Jeb Bush and George Walker were on the payroll of Lehman Bros when it went down)
http://www.democracynow.org/
===============================================
In the early 1980s, under Reagan, regulatory changes took place that gave the S&L industry new powers and for the first time in history measures were taken to increase the profitability of S&Ls at the expense of promoting home ownership.
A history of the S&L situation can be found here:
http://www.fdic.gov/bank/historical/s&l/
What is important to note about the S&L scandal is that it was the largest theft in the history of the world and US tax payers are who was robbed.
The problems occurred in the Savings and Loan industry as they relate to theft because the industry was deregulated under the Reagan/Bush administration and restrictions were eased on the industry so much that abuse and misuse of funds became easy, rampant, and went unchecked.
Additional facts on the Savings and Loan Scandal can be found here:
http://www.inthe80s.com/sandl.shtml
merrill (anonymous) says…
The bottom line when millions upon millions upon millions upon millions of USA jobs are shipped abroad there is no where for people to work in hard times and good times.
Then when elected white collar criminals dream up policies like Reaganomics/Wreckanomics which screw up the economy and put people out of homes and jobs there is nowhere to turn. The USA economy went abroad.
About white collar criminal activity that gets swept under the rug as politicians come out and say let's not dwell on the past let's move forward = BS.
Meanwhile activity such as below becomes repeated:
The republican party are masters at putting millions upon millions upon millions of people out of work. All they do with a remarkable degree of consistency is wreck the economy,initiate huge movements of shipping jobs abroad aka the Reagan-Bush Global Economy and try to wreck social security and medicare.
Is there a definite pattern? Absolutely!
1. The Reagan/ Bush Home Loan Scandal
http://rationalrevolution0.tripod.com...
2. The Bush/Cheney Home Loan Scandal
http://www.dollarsandsense.org/archiv...
3. What did Bush and Henry Paulson do with the bail out money?
http://www.democracynow.org/2009/9/10...
4. Why did GW Bush Lie About Social Security?( This would cost taxpayers $4 trillion and wreck the economy)
http://www.dollarsandsense.org/archiv...
75x55 (anonymous) says…
Ah, nothing like that partisan glow.....
merrill (anonymous) says…
Partisan glow comes easy considering the very colorful glow the NOT republican party presents to the public:
Since the onset of the financial crisis and the passage of the Bush administration’s $700 billion bailout of Wall Street the waters instantly became murky. Such as what were the factors in deciding who received bailout funds? And what happened to all the money?
The answer to those two simple questions is: We don’t know. In a new article in Vanity Fair, the Pulitzer Prize-winning investigative team Donald Barlett and James Steele try to find an answer. The problem is, they write, “once the money left the building, the government lost all track of it.”
http://www.democracynow.org/2009/9/10...
================================
CRIME: Who hosted the Iran Contra secret illegal sale of weapons? Republicans!
http://www.gwu.edu/~nsarchiv/nsa/publ...
http://www.pbs.org/wgbh/amex/reagan/p...
CRIME: Who brought the nation Iran Contra number 2? Republicans!
http://www.democracynow.org/2008/3/5/...
CRIME: Which party illegally spied on the democrats to win an election? Republicans! Watergate!
http://www.washingtonpost.com/wp-srv/...
CRIME: Which party held secret energy meetings and refused our elected officials its' content and who attended? GW Bush and the republicans!
CRIME: Which party lied to congress and the world,went against military advice and created the worst strategic blunder in the history of the USA aka Iraq War? Republican Party! http://www.msnbc.msn.com/id/10348418/
Which party has held secret oil deals with Saudi Arabia?
Republicans!
http://www.democracynow.org/2004/4/20...
CRIME: Secret Oil deals for Iraq Oil- Republicans!
http://www.pubrecord.org/nationworld/...
crime against democracy : pnac's policy document, "Rebuilding America's Defences," openly advocates for total global military domination. Many PNAC members held highest-level positions in the George W. Bush administration. http://www.sourcewatch.org/index.php?...
The USA has 8,000,000(million) fewer jobs for taxpayers today as a result of a Texas republican governor exercising his executive decision making powers as president of the USA. Which resulted in :
2. The Bush/Cheney Home Loan Scandal
http://www.dollarsandsense.org/archiv...
3. What did Bush and Henry Paulson do with the bail out money?
http://www.democracynow.org/2009/9/10...
4. Why did GW Bush Lie About Social Security?( This would cost taxpayers $4 trillion and wreck the economy)
http://www.dollarsandsense.org/archiv...
SnakeFist (anonymous) says…
So let me get this straight: the key to maximizing tax revenue is to keep cutting taxes? By that logic, a tax rate of 0% will maximize tax revenue, right?
We can't comete with China because our standard of living is too high. If you want dependable roads and bridges, police and fire protection, social security and other welfare programs for the old, an outrageously large national defense, and everything else that we “enjoy”, then you have to tax in order to pay for it.
Democrats are “tax and spend”, republicans are “spend but don't tax” - pick your poison, but everyone in a position of responsibility realizes that government spending is necessary.
Liberty_One (anonymous) says…
SnakeFist (Anonymous) says…
"everyone in a position of responsibility realizes that government spending is necessary."
Wrong.
avoice (anonymous) says…
SnakeFist: looks to me like our standard of living that is too high includes a lot of extra police and fire protection, social security and welfare programs. There is just as much wastefulness and unnecessary spending in those areas as there is in anyone's household budget.
And the key to maximizing tax revenue is to tax just enough so that you achieve the maximum volume of payers without eroding your realized dollars. Setting tax rates is no different than setting a price point on any product. If it's too high, it's insupportable and you realize low return. If it's too low, you don't achieve the full potential of "profit" (for lack of a better term). Has to be balanced to achieve the best results.
was_freashpowder2 (Alexander Neighbors) says…
Cut the services by the State
fa,la ,la ,la, la, la, laaa
Next drop the Tax,ax, rate
la,la,la,la,la,la,la,la,la.............
SettingTheRecordStraight (anonymous) says…
devobrun,
Great post! Thanks for the reminder.
BigDog (anonymous) says…
The state Chamber of Commerce is just a mouthpiece whose priorities are now being set by Koch Industries. The Koch brothers really hates paying taxes ... thus they fund Americans for Prosperity and Kansas Policy Institute. They have now hijacked the state Chamber of Commerce and threaten legislators who don't support the agenda of the Koch brothers.
Many local Chambers of Commerce do not support the state chamber. The local chambers realize the impact upon local communities.
Made_in_China (Paul R. Getto) says…
"ales tax exclusions and exemptions, which number in the hundreds.....” For the answer, read these reports funded by our legislature:
http://www.ksrevenue.org/pdf/erosion_...
http://www.ksrevenue.org/pdf/sales_ta...
Hugo Wall School of Urban and Public Affairs
Wichita State University.
Jimo (anonymous) says…
"Business interests, however, claim the tax cuts have been good for the Kansas economy by keeping the state business-friendly and competitive with other states."
Seeing that every other state is in deep doo-doo (even TABOR Colorado has a shortfall of over a $1B), it seems obvious that every other state will be raising revenue the same way. Ergo, Kansas has a lot of room to get rid of these cuts and still remain competitive with other states.
LogicMan: the LJW provides a link to a detailed summary of these sales tax exemptions. Most won't be easy to be rid of -- non-profits, religious groups, public spending like schools, farmers buying seed, etc.
The largest "exemption" though is on materials processed prior to sale (e.g., purchasing metal to build a garage door, the metal purchase has no sales tax, just the final sale of the door). This exemption is half of the total and is estimated at more than $2B! Many an economist has recommended for a long time that the U.S. implement a value-added tax system that taxes every single value-adding transaction, not just the final sale.
As one conservative economist put it: we'll have a VAT once liberals recognize that it raises tons of money quietly and without a lot of pain and once conservatives recognize that it is very regressive.
Made_in_China (Paul R. Getto) says…
“The state maintains a laundry list of dozens of sales tax exemptions that put more than $4 billion beyond the reach of cash-strapped government agencies………
The intergovernmental relations advisory panel put together summary documents that outline for legislators the impact of decisions to manipulate tax policy. For example, $23.5 million in sales tax exemptions are held by charitable, religious or benevolent organizations. There are $2 million in breaks tied to single organizations. Other categories: governmental units, $479 million; business equipment, $119 million; health care, $86 million; and agriculture, $52 million.”
http://www.krwa.net/newsDB/MainAnnoun...
JHOK32 (anonymous) says…
You can thank W and Cheney for wrecking our entire economy. After 8 years of drowning the wealthiest 10% in our country with mountains of our cash, the well was finally drained and the bottom finally fell out of Wall street. Go sing your blues to somebody that has an "R" behind their name & pray that our new President & Congress can dig us out of this huge mess, they may not be able to.........what then?
Liberty_One (anonymous) says…
JHOK32 (Anonymous) says…
"You can thank W and Cheney for wrecking our entire economy. After 8 years of drowning the wealthiest 10% in our country with mountains of our cash, the well was finally drained and the bottom finally fell out of Wall street. Go sing your blues to somebody that has an “R” behind their name & pray that our new President & Congress can dig us out of this huge mess"
They certainly won't be able to if they continue to follow Bush's gameplan of transferring wealth to the wealthy.
avoice (anonymous) says…
Jimo: The metal used to build a garage door falls in the category of "cost of goods" materials in that it is a component among many components that go into producing a garage door. You open that can of worms, and every single product you could wrap your mind around will have sky-high prices because the front-end taxes on the components will all contribute to a higher price to produce and sell the end product. Not to mention that this would be the most blatant double taxation idea ever proffered. Good try, though, because the back-end sales tax on all those sky-high products would also increase. Potentially, tax could be more than 50% of the cost of any given product. Kind of puts us back where U.S. citizens were with England in the mid-1700s.
Boston_Corbett (anonymous) says…
Bigdog speaks the truth:
---------------
BigDog (Anonymous) says…
The state Chamber of Commerce is just a mouthpiece whose priorities are now being set by Koch Industries. The Koch brothers really hates paying taxes … thus they fund Americans for Prosperity and Kansas Policy Institute. They have now hijacked the state Chamber of Commerce and threaten legislators who don't support the agenda of the Koch brothers.
Many local Chambers of Commerce do not support the state chamber. The local chambers realize the impact upon local communities.
toe (anonymous) says…
No way to tax out of the problem. On S&L's-They should not even exist.
taxman3004 (anonymous) says…
Kansas taxes are higher than MO,NE,OK and CO. The taxpayers including businesses are tapped out. Its time for the local governments including the schools to get by with less. Maybe school superintendents shouldn't be paid 100K for being a glorified Public relations spokesperson
SnakeFist (anonymous) says…
Liberty_One responds: "Wrong". Just the response I would expect from a conservative (or a four year old). Good luck maintaining infrastructure and keeping the irresponsible oldsters alive without government spending.
avoice: I get the idea that there is a proper balance between taxation and revenue generation. But what is it? I've never heard a conservative give a number, just insist that it should be ever lower.
ralphralph (anonymous) says…
Sebelius = killed Kansas economy = now killing flu victims with lies.
thepianoman (anonymous) says…
I've already read this earlier. ljworld, as a reader, this is frustrating and fatiguing. If there isn't anything new to report, why put this on the front page? It's a waste of my time. Now if you have an update --- that's understandable...
Response please?????
remember_username (anonymous) says…
taxman3004 - you sure about your tax numbers? Also, wouldn't Iowa be a better choice of peer than Colorado? Median income in Iowa is similar to ks, mo, ne, ok while in CO the median income is considerably higher, thus more revenue can be collected at lower income tax rates. CO gets ca. 53% of state revenue from income taxes while KS gets ca. 41% from the same source.
jayhawklawrence (anonymous) says…
Here is a very good article and zeroes in on one of the biggest problems.
http://www.msnbc.msn.com/id/30229507/...
Misinformation and ignorance is rampant right now. The political discourse is just plain crap right now.
Somehow, someway we have to start competing in the global economy and stop liquidating our assets to enrich stop "A..." on wall street.
Liberty_One (anonymous) says…
SnakeFist (Anonymous) says…
"Good luck maintaining infrastructure and keeping the irresponsible oldsters alive without government spending."
Ahh, the true believer. Without the gov't old people would just be dying in the streets--streets that us dumb hicks would just let fall apart!
Jimo (anonymous) says…
"You open that can of worms, and every single product you could wrap your mind around will have sky-high prices because the front-end taxes on the components will all contribute to a higher price to produce and sell the end product."
Not true. We have the advantage of dozens of countries around the world with such a tax system. Prices are not "sky-high". Indeed, on of the criticisms (informed, knowledgeable criticisms) is that it is TOO difficult to see the tax for consumers and so they don't object when taxes are to be raised.