Archive for Saturday, March 6, 2010

Tax strategy

The Kansas governor and Senate leaders are closer together on state budget matters, but differences still exist.

March 6, 2010

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The governor and leaders in the Kansas Senate finally are on the same budget page — sort of.

Senate President Steve Morris and Vice President John Vratil announced Friday morning that they would push for $300 million in tax increases to close the budget gap for the fiscal year that begins July 1. They said their plan will include an increase in the state sales tax, elimination of some sales tax exemptions and higher taxes on tobacco and alcohol.

The Republican leaders of the Senate apparently have reached the same conclusion Gov. Mark Parkinson reached before his State of the State address: that the state can’t pass a responsible budget without a tax increase. In that speech, the governor also proposed increasing sales and cigarette taxes and eliminating sales tax exemptions.

Morris and Vratil announced their plan less than an hour before Parkinson’s scheduled press conference to announce additional budget cuts for the current fiscal year. During that press conference, Parkinson announced about $50 million in cuts, canceling highway maintenance programs in the state and KPERS death and disability payments and asking legislators to pass a primary seat belt law that would bring $10 million in federal funds into state coffers.

Then, the governor threw something of a curve ball to the legislators. He said he would support a sales tax increase to balance the budget, but that now would be his second choice. His first choice would be to cut tax exemptions and reverse some of the tax-cutting measures that he said had cost the state $9.5 billion since the Legislature went on “a tax-cutting binge” in the mid-1990s.

Parkinson cited the elimination of estate and franchise taxes, the lowering of property tax and the increase of sales tax exemptions from 30 to 99 in the last 20 years. Those measures have helped the state’s wealthiest Kansans, he said, while doing “nothing for the average person.” Tax cuts have benefited special interests, he continued, while leaving the state unable to properly fund public schools, higher education, public safety and the state’s safety net of social services.

The big area of agreement between the Senate leaders and Parkinson is the need to reduce tax exemptions, but the governor said he doesn’t think legislators could accomplish that goal. That being the case, his second choice is raising the sales tax, which has more often gained support.

The governor made strong and valid points about the state’s current financial condition being more than a product of the recession, but we hope he’s wrong about legislators’ ability to address some of the broader problems in the state budget, like sales tax exemptions. Morris and Vratil are attempting to show leadership with a tax proposal that probably will prove unpopular with their Republican colleagues, particularly in the Kansas House. They are trying to chart a responsible course through the current budget crisis and their plan deserves serious consideration and support.

Comments

George Lippencott 5 years, 2 months ago

Yes, we do need a tax increase as cuts to our schools and social services have become punitive.

I love it. Our response is to increase taxes on those who have been hit hardest by our economic decline - mostly government caused). Sales taxes hit hardest on the lower income segment of our society.

We do not even seem to want to discuss a tax increase on the really wealthy, who in general have done well dispite the declining economy. Sustaining a progressive tax system that is not progressive is one more example of how most of us are disrespected by our elites.

Why have our Democratic representatives (we have a lot of them here in Lawrence) not introduced a bill or put forward an amendment that would add tax brackets to our state income tax - not to increase taxes on most of us- to increase taxes on those with incomes over $100K. Even if the party of no would vote it down, at least we would have a record of those who think the really rich are overtaxed (besides Rush).

Can somebody help me understand the problem??

texburgh 5 years, 2 months ago

George is dead on. The Dems should put up the income tax brackets and let the Republicans vote it down on behalf of their wealthy donors. At that time, the legislature might consider increasing the sales tax - a tax which, as George put it, is hardest on the lowest income Kansans. Since it disproportionately punished the poor, Republicans are all for it. But since the cuts also disproportionately hit the poor, at least the poor wouldn't be getting it from both ends.

The estate tax should also be reinstated. This is a windfall tax break for millionaires. 900 Kansans benefit and the rest of us lose services to provide for those 900 millionaires.

This is what you get when you elect Republicans.

George Lippencott 5 years, 2 months ago

texburgh (anonymous) says…

The poor would be getting it from both ends. Services cut and taxes increased. - the poor pay sales tax.

Raise Income Taxes!!!

George Lippencott 5 years, 2 months ago

ComradeRedRooster (anonymous) says…

They must be rotating in their graves at the Kremlin

George Lippencott 5 years, 2 months ago

ComradeRedRooster (anonymous) says…

They must be rotating in their graves at the Kremlin

George Lippencott 5 years, 2 months ago

ComradeRedRooster (anonymous) says…

They must be rotating in their graves at the Kremlin

booyalab 5 years, 2 months ago

1.Fire everyone in the Kansas senate. 2.Stand back and marvel as nothing changes, except more spending money for everyone until the next election.

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