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Archive for Friday, March 5, 2010

Parkinson announces budget changes, slams Legislature’s tax breaks; Senate president advances tax increase plan

Parkinson criticizes lawmakers for past ‘tax-cutting binge’

March 5, 2010, 11:05 a.m. Updated March 5, 2010, 3:54 p.m.

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Parkinson announces more cuts

Governor Mark Parkinson announced more budget cuts for the state Friday. Parkinson said he wants to avoid cuts to education funding, among other things. Enlarge video

— As the budget crisis intensified Friday, Senate Republican leaders said they will push for a $300 million tax increase and Gov. Mark Parkinson sharply criticized the Legislature for going on a 20-year “tax-cutting binge” for businesses and the wealthy.

Meanwhile, Parkinson applied an $85 million Band-aid to balance the state’s current fiscal year budget. Officials face another $467 million revenue shortfall in the budget year that starts July 1. Last year, they cut nearly $1 billion from a $6.4 billion overall state budget as Kansas fell into the national recession.

Senate President Steve Morris, R-Hugoton, (left), and Senate Vice President John Vratil, R-Leawood, talk with reporters on Friday. They said a $300 million tax increase is needed to balance the budget for the fiscal year that starts July 1.

Senate President Steve Morris, R-Hugoton, (left), and Senate Vice President John Vratil, R-Leawood, talk with reporters on Friday. They said a $300 million tax increase is needed to balance the budget for the fiscal year that starts July 1.

But in announcing his budget changes, Parkinson said it wasn’t only the recession that was the root of the state’s budget collapse.

He blamed the Legislature for decimating the tax base through tax cuts given to the rich and special interests over the past two decades. He named the elimination of the corporate franchise tax, estate tax and the property tax on business and machinery as examples of bad tax policy.

“What have we done for the average person? Virtually nothing,” Parkinson said. “The public has got to understand, they are being left out,” he said.

Parkinson, a Democrat, said he didn’t expect the Legislature to undo any of its past tax decisions, so he reiterated his call for a temporary 1-cent increase in the state sales tax to help address the looming budget shortfall.

The Kansas Chamber, which has successfully lobbied for many of the business tax breaks that Parkinson criticized, issued a news release blasting the governor.

"The governor's refusal to admit that runaway state spending is the true culprit of our budget crisis is as unconscionable as it is ridiculous," Kansas Chamber Board President Mike Maddox said.

Maddox said a tax increase will hurt Kansas families and cause businesses to go to other states. "Raising taxes in a down economy will only further jeopardize Kansas jobs," he said.

Earlier in the day, Senate President Steve Morris, R-Hugoton, and Vice President John Vratil, R-Leawood, said they support a $300 million tax increase.

But they said they weren’t sure how to get there. Morris said increases in the tax on cigarettes, alcohol, the removal of sales tax exemptions and an increase in the state’s 5.3 percent sales tax were all under consideration.

Morris said $300 million more in tax revenue, combined with some expected increases in federal funding may close the budget gap. He called on Kansas’ U.S. Sens. Pat Roberts and Sam Brownback, who are both Republicans, to support in Congress continuing an increased match of federal dollars for the Medicaid program.

“I support getting us to $300 million in new revenue. The bottom line is we have to balance the budget,” Morris said.

Morris also said Parkinson’s proposed increases in the next fiscal year for public schools and higher education are probably not doable in the current budget mess.

Democrats, who are in the minority in the House and Senate, said they were willing to consider plans from the Senate Republicans. “Everything is on the table,” House Democratic Leader Paul Davis of Lawrence said.

He and Senate Democratic Leader Anthony Hensley of Topeka said other tax increase proposals include adding a new bracket or surcharge for high earners under the state income tax.

“I’m interested in any and all options,” Hensley said.

But House Republican leaders have been opposed to tax increases. Earlier this week, O’Neal said the drop in tax revenue shows that taxpayers are hurting and they don’t need the burden of increased taxes.

Parkinson’s cricitism of Kansas tax policy came as he released budget changes to address a growing shortfall in the current budget cycle.

The governor proposed canceling highway maintenance projects, suspending a payment into a disability fund for state employees and passage of a tougher seat belt law to attract more federal dollars.

Many of the proposals will require legislative approval. After being briefed by Parkinson, legislative leaders praised him for being pro-active.

Comments

jayhawklawrence 4 years, 1 month ago

There is no question that corporate socialism, as some people call it, is a big problem.

The elephant in the room for me is the inability of our congress to make fair and rational decisions that protect the average American and move us forward in a positive direction as a nation.

I still have faith in our President that he has the talent and intelligence to be a good President. However, I don't like some of the people hanging around him and this has been the rap on Obama for a long time.

Who is the real Obama?

A lot of people admired Truman but ignore the fact that the Kansas City Mafia helped him get elected. You have to deal with all kinds of people when you become a politician.

It is very hard to see myself as member of either one of the US political parties. They both seem to be dominated by extremists and political ideologues with no real common sense.

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Frank Smith 4 years, 1 month ago

I have to agree, more or less, with Paulette, Bad Llama, Jimo and Texburgh.

The state Chamber is a wholly-owned subsidiary of oil barons David and Charles de Ganahl Koch. Koch Industries have fought for TABOR, privatization of prisons, school vouchers, teaching "creationism" in schools and against raising the Kansas minimum wage from $2.65/hr two years ago.

The Kochs were worth $19 billion apiece, when I last checked last year. They were the 19th and 20th richest people in the WORLD, and they don't want Kansans to make more than $2.65/hour.

What we need to do, besides making our state taxes truly progressive, is to start taxing oil stripper wells as they do in every oil producing state save for California which taxes reserves instead. These taxes were exempted decades ago when oil was selling for $7 a barrel. NYMEX sweet crude went for $81.50 a barrel, yesterday.

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Richard Heckler 4 years, 1 month ago

Actually 15 million are out of jobs as a result of jobs being the nations favorite export item that corporate america has to offer.

Tax incentives and tax breaks = no such thing as free market

"what is tax increment financing? I’ll tell you what it is. You go to the store with your goods, you pay for it at Wal-Mart, and there’s a very good chance that that store has made a deal with the government that the sales taxes you are required to pay, that government requires you to pay, never go to the government. Instead, those sales taxes are kept by Wal-Mart and used to pay the cost of the store. And typically in those deals, the store is tax exempt, just like a church."

That’s corporate socialism. And what we’ve gotten is corporate socialism for the politically connected rich—not all the rich, the politically connected rich—and market capitalism for everybody else.

"We pay billions of dollars in taxes that never get to the government." Much of the sales tax we pay at big box stores and shopping centers is diverted to the large companies that own the stores. It's just one of the many swindles these chains have learned to perpetrate against city and county governments. This is so effective that the Cabela family, which owns a chain of big-box sporting goods stores, receives 137% of its profits from taxpayer subsidies. If they couldn't work this scam, they wouldn't be in business at all."

That’s corporate socialism. And what we’ve gotten is corporate socialism for the politically connected rich—not all the rich, the politically connected rich—and market capitalism for everybody else.

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Bob_Keeshan 4 years, 1 month ago

barrypenders (anonymous) says…

People that are successful in the 'Free Market' must be penalized by those that Can't succeed.

Yes, because those who can't succeed must pay their full share of taxes.

Those who succeed in the "free market" convince the government to eliminate that tax burden, but only for the successful. What is free market about every homeowner in Kansas paying property taxes but a select few corporations paying none?

How on earth is that a free market? Let's make the market truly free - eliminate all sales tax exemptions and lower the rate to 2.5%.

What, no? That's an assault on the "Free Market"? Talk about a poser...

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barrypenders 4 years, 1 month ago

People that are successful in the 'Free Market' must be penalized by those that Can't succeed. 'Spread the Wealth' Yes We Can. The Can'ts need housing, Food, Posercare. They need everything. Takers are a special 'Culture'. They think high of themselves.

If they didn't need to 'Demand' so many items , Taxes would be non existant.

Transformation!

Stimulus, PAD Takers and Posercare live unprecedented

Darwin bless us all

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BadLlama 4 years, 1 month ago

Get rid of the tax cuts for rich and for the special interest groups and maybe we won't have to raise the sales tax. The republicans want the poor and middle class to fund the state. They will never get rid of those tax cuts because that's who buys their seats in the legislature in the first place. It's not right.

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Fatty_McButterpants 4 years, 1 month ago

WallyWalrus: Nice thought...but it violates the Constitution just a wee bit.

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toe 4 years, 1 month ago

All governments at all levels are broke. Raising taxes risks civil disobedience unrivaled since the civil war. What is a people to do. I know. Lower standard of living. Dang, and just when I wanted to buy more stuff.

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Jimo 4 years, 1 month ago

"Maddox said a tax increase will hurt Kansas families and cause businesses to go to other states. "Raising taxes in a down economy will only further jeopardize Kansas jobs," he said."

Rebalancing taxes to fall on the wealthy instead of middle class by definition does not hurt Kansas families. Despite this blabbering fiction about 'out of control' spending, other states are far worse off so, no, businesses aren't going to depart the Nirvana of the Plains for elsewhere.

Had the GOP not cut taxes in an UP economy BEFORE fully funding the State's obligations then there wouldn't be the fiscal mess we have now.

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jayhawklawrence 4 years, 1 month ago

When the US started losing our ability to compete in the world of global manufacturing, our economy began to decline. Manufacturing leaders have always been in awe of how ignorant the government seems to be in understanding their needs and their impact in the US economy.

The political issues that have been floated out during the Obama administration have been frightening for manufacturers. Because of the manner in which these issues are debated (irresponsibly) in our current political process and because of past disappointment with government’s attitude toward manufacturers, each one of these issues invokes a lot of fear.

The big issues I have been hearing recently are:

Cap and Trade: Looks more and more like a move to allow government to take over US manufacturing and to burden an already struggling and suffering industry with more heavy costs. Another cluster you know what.

Health Care: Based on government’s track record working against manufacturers, they cannot be faulted if they fear another kick in the butt on this one. In the end, manufacturers believe they will be asked/forced to pay a heavy price that they cannot afford.

Trial lawyers and frivolous lawsuits. We know what lawyers do and without protection from frivolous lawsuits targeting their products and employees it is hard to stay in business. Many manufacturers have horror stories of being sued unfairly and having to try to protect themselves in a costly lawsuit. You would be in awe of what kind of lawsuits have been filed against decent, hardworking and honest manufacturing companies. Congress seems to not care.

Sales, inventory and use taxes on new industrial equipment. At a time when our industries are struggling to compete in the world economy, we continue to try to add to their burden. These taxes on new equipment prevent a company from being able to buy modern industrial equipment that can be used to compete against China and India and other countries that bend over backward to assist their important industries Manufacturers that want to grow their businesses and create new jobs will simply look for places to farm out their manufacturing. Places like China will continue to receive orders from US companies for parts and assemblies because they are not burdened by government in the way that we are. They are eager to create new jobs for their growing economies while our government continues to let us down.

There is not going to be any support for the Democrats if they don’t figure out that forcing or promoting unionization, cap and trade, a screwy health care plan and increasing taxes on manufacturers and not to mention protecting trial lawyers is not going to make them very successful in the next election.

Nothing is more insulting than listening to an intellectual say we cannot compete in the world anymore because we are not good enough.

As much as I hate the Republicans, you have to go with the lesser evil.

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texburgh 4 years, 1 month ago

"The Kansas Chamber, which has successfully lobbied for many of the business tax breaks that Parkinson criticized, issued a news release blasting the governor."

the Kansas Chamber is a wholly owned subsidiary of Koch Industries. Need proof? look at the reports of the Chamber PAC - nearly every dollar they get for politics comes from Koch or retired Koch execs or shell industries set up to serve Koch. The Kansas Chamber doesn't give a poo about working Kansans, local chambers, economic development outside of what's good for Koch.

If you are blasted by the Kansas Chamber, consider yourself honored - you must care about the average working stiff who depends on good schools for his/her kids, and services for your elderly parents. the Kochs (and the Chamber) sure as heck don't.

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geekyhost 4 years, 1 month ago

Quit this talk about regressive sales taxes. Raise income tax on the upper brackets for cripe's sake. The cost of living here is still pretty good comparatively, so everyone who is in the uppermost bracket now is still doing ok and won't find it an incentive to move off to some other state.

I'm willing to pay more taxes if it means my kids get educated, the roads get paved, and the people who need special services get them.

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headdoctor 4 years, 1 month ago

paulette2 (anonymous) says… nefarious activity. Hmm. And just how much of that type of income have you declared and payed taxes on? I know. Do as I say, not as I do. Right?

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Keith 4 years, 1 month ago

" Bob_Keeshan (anonymous) says… The comments of Mike Maddox, Lawrence resident, should make every reader of the Journal World cringe. 150 years ago, Mr. Maddox would be escorted out of town on a rail, likely covered with a sticky substance and the remnants of some unfortunate game bird."

My sentiments exactly, bring back tarring and feathering!

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Thinking_Out_Loud 4 years, 1 month ago

The Legislature had certainly better not raise taxes, of any sort.

If they do, Mike O'Neal will sue 'em.

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macon47 4 years, 1 month ago

tax people 5 bucks every time they post on the ljw website

10 bucks for the folks that post but dont subscribe to theljw paper

15 bucks for people that post from out of state

end of problem,

(or end of midless postings)

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wastewatcher 4 years, 1 month ago

What is the Governor thinking by blaming the Legislature for helping only the rich and businesses and then he proposes taxes that hurt the poor the most, sales taxes. It is time for the press to check the Gov's voting record as a Senator and compare his actions ti his talk. And he can prropose changes to correct anything that he feels is not fair, it is time for him to walk the walk and quit the whining.

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Bob_Keeshan 4 years, 1 month ago

The comments of Mike Maddox, Lawrence resident, should make every reader of the Journal World cringe.

150 years ago, Mr. Maddox would be escorted out of town on a rail, likely covered with a sticky substance and the remnants of some unfortunate game bird.

"The governor's refusal to admit that runaway state spending is the true culprit of our budget crisis is as unconscionable as it is ridiculous," Kansas Chamber Board President Mike Maddox said.

Runaway state spending? Prove it. In fact, I call on Mike Maddox to prove it at the next meeting of the Lawrence School Board.

Go to that meeting and prove there is runaway state spending, Mr. Maddox. Look your neighbors in the eye rather than hiding behind ridiculous press releases. Do you have the courage?

Does this newspaper have the courage to demand the same of Maddox?

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Mary Sucha 4 years, 1 month ago

Under "w" the number of federal jobs mushroomed (2 wars, new homeland security agency) while nearly 7 million americans lost jobs.

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svenway_park 4 years, 1 month ago

Hey Paulette, when you copy things wholesale off of the internet, maybe you would want to give attribution for the reporting. Especially if it is some struggling Hungarian students.

Or do all architects just steal intellectual property like you do?

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yourworstnightmare 4 years, 1 month ago

Sniff sniff...

Little barrypampers needs a change.

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yourworstnightmare 4 years, 1 month ago

Republicans proposing tax increases. Nice.

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barrypenders 4 years, 1 month ago

Federal Big Government jobs have gone up 55000 and 'Free Market' jobs have decreased by 4,000,000. Let's tax Big Government jobs. The Poser has all the money. Kansas could make a mint.

Take over. Jihad.

Stimulus, Transformation and Posercare live unprecedented

Darwin bless us all

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Richard Heckler 4 years, 1 month ago

Tom Holland for Governor!

Kansas should go with the Parkinson sales tax suggestion. This is one tax that gets no reprieve no matter what. Republicans just have NO money management skills whatsoever!

The more republicans in office the more tax dollar and budget mismanagement.

The republican party have become masters at putting millions upon millions upon millions of people out of work. AND stealing taxpayers retirement plans along the way.

What Repubs 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/war/bush_family_and_the_s.htm

  2. The Bush/Cheney Home Loan Scandal http://www.dollarsandsense.org/archives/2009/0709macewan.html

  3. Still A Bad Idea – Bush Tax Cuts http://www.dollarsandsense.org/archives/2001/0301miller.html

Tom Holland for Governor!

Face it if the republican controlled legislature of the past 22 years had been money managers Kansas would not be in this revenue mess. In spite of the Bush/Cheney financial disaster.

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Pogo 4 years, 1 month ago

Yes, those tax dodges are disgusting and contribute in a very large way to the problem. Reverse them.

However, that being said, Furlough state workers, including Regent's institutions staff.

Several other states have found that giving state employees some much needed time off (albeit without pay) is doing wonders for their respective budgets.

Let's give furloughing of state paid employees a try......couldn't hurt.....

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George Lippencott 4 years, 1 month ago

Increase taxes on those making more than $100K. Our system is flat from $60K on up!!

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paulette2 4 years, 1 month ago

When is the KS DEPT of REVENUE going to investigate KOCH INDUSTRIES?

Take the example of Koch Industries. This the largest privately held conglomerate on the planet, employing approximately 70,000 people worldwide with annual revenues exceeding $100 billion. Their financials are kept strictly confidential and they do not disclose information about their management structure and activities. Koch is known to be aggressive with their tax avoidance strategies, having sued the IRS for $20 million in 2006 claiming that their tax refund was not correct. Public documents available on the Luxembourg government website, Legilux.lu, reveal that Koch operates a complex system of offshore companies and accounts in order to avoid paying US taxes on huge sums of corporate profits. Out of his Kansas office, Global Tax Director for Koch Industries, Craig M. Munson, manages these offshore corporations with the assistance of a shady Luxembourg company, ATOZ s.a., whose partners are primarily former Arthur Anderson staffers – the tax advisory giant that ceased to exist as a result of their felony conviction in the Enron “off-shore and off-balance sheet” debt scandal of 2002. With the help of his offshore tax avoidance experts at ATOZ, Mr. Munson has set up a network of companies under the brand name “KoSa” that are used to move and consolidate funds offshore in order to avoid taxes. Some of the companies include “KoSa Foreign Investments” which was formed in June 2009 with over $1.8 billion in capital and “KoSa Luxembourg” which in August of this year declared a capital of over 520 million Euros. There are also vehicle companies such as “KoSa US Receivables Company” which declared a capital of nearly $185 million in August and “KoSa Canada Receivables Company” with a capital of nearly $35 million. These companies, and several others in the “KoSa” structures set up by Mr. Munson and his ATOZ facilitators are shells with no employees or physical operations. They are all incorporated under the “s.a.r.l.” status which has light reporting and governance requirements and is normally used for small businesses. When the sums involved are significant, such as the case here, the use of an “s.a.r.l.” is often cover for money laundering or tax avoidance schemes. In this case, it appears that these companies exist for no reason other than to avoid the payment of taxes. This is not the first time that Mr. Munson’s Luxembourg companies are involved in nefarious activity. In 2002, Arteva s.a.r.l., a Luxembourg company doing business as “KoSa” with Mr. Munson named as manager, was sued by the United States and plead guilty to charges of criminal price fixing. A government source, wishing to remain anonymous due to direct proximity with the issue, has confirmed that the IRS will be investigating the matter.

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KSManimal 4 years, 1 month ago

alm77 (anonymous) says…

" "You gotta have income to pay an income tax." - exactly. We have too many people on unemployment."

Wrong. Unemployment benefits are taxable income.

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alm77 4 years, 1 month ago

"You gotta have income to pay an income tax." - exactly. We have too many people on unemployment. I know several who have given up the job hunt because they aren't hurting bad enough to go look for work or create their own incomes. No income = no income tax. No income = no purchasing power = no sales tax.

We need to stop paying out unemployment and start creating jobs. Personally, I have no idea how that happens, but I do know that I wish the recipients of unemployment benefits had to work for them. The state could have them do any number of jobs from paperwork to trash pick up along highways. The possibilities are endless. As it is, they sit at home and collect a check and it's not helping anybody.

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svenway_park 4 years, 1 month ago

You gotta have income to pay an income tax.

But If we would implement a tax on dogs-pooping-on-school-grounds, Paulette could finally make a contribution to the local school district budget problem.

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Bob_Keeshan 4 years, 1 month ago

SpunKey (anonymous) says…

Raising sales tax is what they do in tourism places. Kansas is already laughed at by visitors because we still tax food (hitting the poor again).

When will Kansas (the govt) begin to see that Kansans (the people) do NOT have enough money to make this work. Long term spenging cuts and attracting outside money are the only REAL solutions. Attract money from outside Kansas!

That's what the legislature says it is doing when they cut taxes on businesses.

You can't have it both ways - either 2.8 million Kansans pay taxes or businesses lose their targeted giveaways.

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Richard Heckler 4 years, 1 month ago

Let's tax online purchases and just maybe the state will NOT need to increase the sales tax rate.

Call in all sales tax exemptions.

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macon47 4 years, 1 month ago

tax people 5 bucks every time they post on the jwl website

10 bucks for the folks that post but dont subscribe to the paper

15 bucks for people that post from out of state

end of problem, (or end of posting)

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SpunKey 4 years, 1 month ago

Raising sales tax is what they do in TOURISM places. Kansas is already laughed at by visitors because we still tax food (hitting the poor again).

When will Kansas (the govt) begin to see that Kansans (the people) do NOT have enough money to make this work. Long term spenging cuts and attracting outside money are the only REAL solutions. Attract money from OUTSIDE Kansas!

The current state budget problem isn't just a matter of the national economic hurt... this is also a product of the slide Kansas has been in for two decades (due to losses in farming and people/businesses moving out of state). This started PRIOR TO the federal economy joining us in the toilet.

(Again, the "r" word just keep ringing through my head!)

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monkeyspunk 4 years, 1 month ago

Republicans want to tax, but only when it is their idea... OK.

When are we going to see the Tea Party candidates start popping up?

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Flap Doodle 4 years, 1 month ago

Tax popsicles. Paulette should have one before the price goes up. It's a cool and fruity treat on a winter day.

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barrypenders 4 years, 1 month ago

Good idea Wallythewalrus.

Big Government could make all roads a turnpike, collecting user fees from visiting Tourists and capitalize on the 'Free Market' growth like 70 fosters.

Stimulus, Big Government Mandates, and Posercare live unprecedented

Darwin bless you

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paulette2 4 years, 1 month ago

How about a Kansas Department of Revenue review of off shore tax shelters by Koch Industries?

google search Koch & off shore tax shelter investigation begun October 2009 by IRS, for the story.

$100 Billion gross with money laundered through Luxemborg instead of Wichita?

70,000 global employees but $100 BILLION gross.

How much KS tax does Koch pay?

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paulette2 4 years, 1 month ago

How about a Kansas Department of Revenue review of off shore tax shelters by Koch Industries?

google search Koch & off shore tax shelter investigation begun October 2009 by IRS, for the story.

$100 Billion gross with money laundered through Luxemborg instead of Wichita?

70,000 global employees but $100 BILLION gross.

How much KS tax does Koch pay?

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Shane Garrett 4 years, 1 month ago

I say we just collect a tax for entering the state of Kansas from those who do not live here. The state could set up entry point tax booths. No state driver license, no state tag, Boom or Bam, State collected entry tax. Or we could fire all those in charge of creating this mess.

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yourworstnightmare 4 years, 1 month ago

Looks like little barrypampers has thrown his rattle from his crib again.

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whats_going_on 4 years, 1 month ago

barry, GET OVER IT. God, get a new line, we know what you think already, 500 times over.

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barrypenders 4 years, 1 month ago

Just tax the Tourists. Visit Lawrence for tips. That Progressive Articulate Dominion of the Village is in a position to shed light on the economy.

Stimulus, Transformation and Posercare live unprecedented

Darwin bless us

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