Official: Repealing tax exemptions would help finance state services

Exemptions since ’95 have taken $10.9B from state treasury, leader says

? A top official in Gov. Mark Parkinson’s administration on Wednesday said Kansas needs to repeal some tax exemptions to provide the revenue needed to fund crucial state services.

Kansas Secretary of Revenue Joan Wagnon said tax exemptions granted by state elected leaders since 1995 have shorted the state treasury $10.9 billion. Wagnon’s comments came during a forum at Washburn University.

Meanwhile, tax revenue shortfalls this year have resulted in several rounds of budget cuts, and Parkinson is expected to cut another $260 million next week.

“In a time of financial crisis, you don’t give away your revenue,” Wagnon said.

Wagnon is advocating a repeal of sales tax exemptions aimed at giving specific organizations a tax break. If repealed, that would produce more than $200 million in taxes.

She also called on the Legislature to enact a three-year moratorium on any new property or sales tax exemptions or income tax credits.

Parkinson has said he would not consider tax issues until he starts working on the next fiscal year’s budget.

Shannon Jones, executive director of the Statewide Independent Living Council of Kansas, said tax cuts have taken money away from helping those with disabilities.

Currently more than 3,000 people are on waiting lists to receive services in their homes and communities and to keep them out of nursing homes, Jones said.

“The Kansas state budget cannot sustain any more cuts,” Jones said. “There is no more meat on the bone to cut.”

Bradley Borden, an associate professor of law at Washburn University, said the state’s numerous tax exemptions and credits have choked off revenue to pay for state services and increased the tax burden on everyday Kansans.

In 2008, the state sales tax applied to $57 billion in sales, but $75 billion in sales was exempt from the tax.

And, he said, many of the tax exemptions are unfair. For example, he said, a young couple starting a family must pay sales tax on baby formula, diapers, food and clothing. Meanwhile, a person who buys male-enhancement drugs is not subject to the state sales tax.

“The repeal of tax expenditures could thus broaden the tax base, reduce the tax burden most of us bear, and more fairly allocate the tax burden,” he said.