Topeka — The lines deepened Friday between those wanting a tax increase and those wanting more cuts as a new revenue estimate revealed a $510 million state budget hole and a shaky economy.
Given the revenue freefall over the past year of recession, Gov. Mark Parkinson’s budget director Duane Goossen said the dropping revenue figures were expected. Previously the shortfall had been in the $450 million neighborhood.
Alan Conroy, director of the Kansas Legislative Research Department, said the state economy shows “flickers of hope” but he added, “at best, the economic recovery is anemic at this point.”
The new report, produced by state budget experts and economists, gives the Kansas Legislature a target when it returns April 28 to write a budget during the wrap-up session.
Reaction was quick.
Parkinson said a tax increase is needed to shore up the staggering state budget, which has already been cut by $1 billion. He has proposed a temporary state sales tax increase of 1 cent from 5.3 cents per dollar to 6.3 cents per dollar, plus a 79-cent per pack increase in the cigarette tax.
“This hole is too big to fill with additional cuts. Five hundred ten million in cuts would decimate our schools, public safety programs and safety net services for our most vulnerable Kansas,” Parkinson, a Democrat, said.
He was backed up by advocates for public schools and higher education.
Kansas Board of Regents Chairwoman Jill Docking said additional budget cuts “would devastate a system already crippled by cuts.” Higher education has been cut 13 percent over the past year, which has led to layoffs, fewer class offerings and tuition increases, she said.
Kathy Cook, executive director of Fund Our Public Schools, said, “We have only once chance to educate the next work force for Kansas; if we destroy our education system we destroy our chance for economic recovery.”
House Democratic Leader Paul Davis, of Lawrence, said public schools, higher education and Kansans with disabilities could not take another round of budget cuts. “Now, it’s time to make the tough choices that we knew were inevitable,” he said.
But House Appropriations Chairman Kevin Yoder, R-Overland Park, said a tax increase would hurt Kansans who are struggling and that the major problem in the state is unemployment. “Would a tax increase help small business hire people again? I don’t think it will,” Yoder said. Yoder and House Republican leaders back a budget plan that keeps the lid on state taxes, but critics say will force local property tax increases to make up for lost school funding.
Conroy said the major problem facing the state now is the unemployment rate of 6.9 percent, which is expected to hold steady for the next year. Conroy said the high jobless rate reduces individual income taxes, one of the major sources of state government revenue.
The new revenue estimate showed an immediate $70 million shortfall in the current fiscal year that ends June 30. The hole could grow from $450 million to $510 the next fiscal year.
Meanwhile, the anti-smoking group Tobacco-Free Kids said the Legislature could raise $100 million through a $1 per pack cigarette tax increase, and similar increases on other tobacco products.
The organization said the proposal should be a no-brainer for legislators because a recent poll showed 69 percent of Kansans support the $1 per pack increase.
Whatever the solution, legislators said they faced a tough road ahead. “There is no good or popular option that will get the job done,” said Senate Republican Leader Derek Schmidt, of Independence.
Budget committees will start meeting next week to prepare for the wrap-up session.
Comments
LJWorld.com doesn’t necessarily condone the comments here, nor does it review every post. Read our full policy. Also, read about banned accounts and harassing comments.
dudedog12 (anonymous) says…
Sooo, why not concentrate efforts to bring value added jobs to the state to get some tax base generated. You can't get blood out of a turnip. You don't fix anything by cutting people out of their jobs, it only snow balls the effect, as you should realize by now. Increasing taxes does no good if there are no jobs to support that... bottom line is we are in dip do do.... if you guys are in the mood to cut wages and lay off, why don't you legislators take a few days off without pay and even further, take about a 10% or more pay cut, hell i can't even afford to eat out anymore due to the tax burden, lower wages and all that adds on to that... the rich are going to have to sacrafice some along with us poor people, us poor can't support you upper cuts anymore....
HomeSlice (anonymous) says…
Since 47% of the population doesn't pay federal income tax, and some even get a check from the government, surely those folks won't mind paying more in state taxes. Only fair, right? Or do we pummel the 'rich' and suck more capital and job creation out of the economy?
Or we could cut spending....naah.
beatrice (anonymous) replies…
I can't believe some people still think trickle-down economics works.
It doesn't.
tuschkahouma (anonymous) says…
if the GOP is re-elected, get them to save for a rainy day this time. Wishful thinking
for a bunch of tax rebates for the rich, really?
rtpayton (anonymous) says…
Make all companies pay a flat tax so those that shelter money in the Cayman Islands now pay something. I would like to know how many billion dollar corporations pay nothing in taxes.
GardenMomma (anonymous) replies…
Here's one example:
"GE had plenty of earnings last year -- just not in the United States. For tax purposes, the company's U.S. operations lost $408 million, while its international businesses netted a $10.8 billion profit.
...
Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a "tax benefit" of $1.1 billion back into its reported earnings."
Source: http://money.cnn.com/2010/04/16/news/...
oneeye_wilbur (anonymous) says…
Brilliant minds at work. Raise the taxes so that those employed in the public sector will want a raise, then those in the private sector will pay more for their raises plus the tax increase. The private sector will then see less spending. It starts at home and will end at home.
Which merchant in Lawrence will you plan to spend less with?
thepianoman (anonymous) says…
How about restructuring every government agency..streamline....make them more financially efficient....eliminate unecessary positions......bla bla bla...It's a broken record folks...
Moderate (George Lippencott) says…
It grows worse. See:
http://www2.ljworld.com/weblogs/loyal...
independant1 (anonymous) says…
Just print more dollars, it's easier that way.
Centerville (anonymous) says…
If New Jersey can make some headway cleaning up after it's crazed spending spree, why can't we?
WWWW (anonymous) says…
You can't hold state taxes level, and then underfund local governments, without also capping property taxes. Otherwise you just shift the burden to those areas with a weaker, lower tax base. In Indiana, the GOP governor refused to raise taxes, refused to dip into an actual state surplus (it's there for some other rainy day), and property taxes are capped. The result: the unemployment comp fund has to borrow from the feds (sound familiar), and local districts across the state have laid off their kindergarten aids and elementary and middle school band and art teachers. Extracurricular activity participation fees were raised. Welcome to the new America. It's not whether your roads get repaired, it's whether you are even going to have a paved road.
SFBayhawk (anonymous) says…
Rent Memorial Stadium and AFH to Kansas Athletics, Inc.