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Archive for Sunday, May 2, 2010

Senate tax increase proposal will likely be changed

May 2, 2010

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— Early this week, the Senate will consider a $434 million state tax increase, but even those who supported the measure in committee doubt it will survive intact.

“I don’t for a minute think that it’s the final product. You have to have something to start debating on the floor,” said Senate Ways and Means Committee Chairman Jay Emler, R-Lindsborg.

Emler saw an earlier tax proposal fizzle in committee, but on Day Three of the wrap-up session, which began last week, the committee recommended the tax package to the full Senate.

Since the Jan. 11 start of the 2010 legislative session, legislators have been under the gun to balance the state budget amid record revenue shortfalls.

When the wrap-up started, Gov. Mark Parkinson, who has cut nearly $1 billion from the budget over the past year, told the Legislature no more cuts.

What the committee produced is pretty much what Parkinson called for more than 3 1/2 months ago: a temporary 1-cent increase in the state sales tax and a 55-cent per pack increase in the cigarette tax.

But those opposed to the plan say there are other actions the state could take to save money, including selling state assets, such as office buildings, and then leasing them back, and catching more Medicaid fraud.

“I think there are other possibilities to narrow that gap,” said Sen. Mark Taddiken, R-Clifton.

But Emler said the revenue is needed to support a budget that avoids additional cuts in education and social services.

In the House, Republican leaders want to cut more from the budget and have rejected the idea of increasing state taxes.

Meanwhile, on the tax side, some Democrats say they would like to see changes made in the state income tax to make the tax system more fair. Senate Democratic Leader Anthony Hensley of Topeka has a proposal to reduce state income taxes for most Kansans while increasing rates for the wealthiest.

Comments

finance 3 years, 11 months ago

Busted. My life as a poet revealed; and I thought I could pass myself off as someone smarter.

Enron accounting would be a widespread practice if it were easier not to get caught. Scamming naive investors with falsely inflated securities is another common practice. It is not comforting to know that anything is "a common practice" in either public or private sectors--witness, the current economic crisis. You need another argument.

I guess it comes with the gentle life of a poet to have assumed that landlords are not philanthropists. Gee--how could I have lived so long and have not known that landlords intentionally operate in deficit mode due to their civic-mindedness? I wish I'd known sooner that landlords, upon buying a property, don't (a) expect to pass ad valorum property tax costs on to their tenants; (b) don't expect to pass operations and maintenance costs on to their tenants; and (c) don't expect to make a profit on their investment. Now that I'm properly educated, hell--let's sell everything in the state to these newly discovered philanthropists who will sacrifice themselves for the public good (i.e., landlords). This has to be the greatest discovery of all time, and I--a humble poet--have unearthed it. Hmmmm.

Call me a skeptic, but landlords expect a return on capital invested. It comes from expenses, including taxes and upkeep, being less than rent/lease payments levied upon tenants. But, go figure--obviously, I have it all wrong. I would apologize, but I'm too embarrassed at my own naivete.

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notajayhawk 3 years, 11 months ago

finance (anonymous) says…

"Of course not. A sale is one-time monies. And, with real estate being illiquid, it is money that can't be reached immediately--and in this economy--no time soon unless incredible luck is on the seller's side. And even after sold, you are right--then you begin handing back the proceeds realized from the sale in the form of lease payments which will one day exceed the initial sale proceeds. Bottom line--you're right--selling off paid-for assets to obtain one-time relief produces a headache later on."

I certainly hope your screen name isn't because you're a finance major.

Selling off buildings and leasing them (or part of them) back is a common practice in both the private and public sectors. In the public sector, you have the advantage that a building that formerly generated no property tax revenue now does. It saves a lot of money because the landlord is responsible for major maintenance and repairs. And when all is said and done, the one-time sales proceeds are substantially higher than what you would have gotten if you stayed in the building until it was crumbling around you.

You also realize quite a savings if you no longer need the entire building.

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mr_right_wing 3 years, 11 months ago

Here's what our own City Commission, Topeka and Washington D.C. don't seem to be able to comprehend....the money is not out here! We do not have your extra money! All we can offer you are empty wallets! Someday, when or if our economy ever recovers it will most likely be a different story. Yes, when/if the money is ever there it'd be nice to see our library improved. We are not heartless, unfeeling people; there are social programs that we CANNOT afford right now that effect the livelihood as well as quality of life (or lack thereof) of our neighbors. I am truly sorry it is this way now, but until things change, you'll just have to be satisfied with TURNIPS!

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Keith Richards 3 years, 11 months ago

"Since 1985, state government has grown by 54 percent, while state university support has grown by a measly 5 percent."

This was before the state made a $100 million, or 13% cut to higher ed funding.

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Centerville 3 years, 11 months ago

No one dares look at the lease arrangements Sebeleus made with her contributors in the development community, Thankfully, those gravy trains will come to a screeching halt next year. In the meantime, we're being taken for a big ride. This is what we get when we allow our politicians to reward incessant whining with other peoples' money,

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Godot 3 years, 11 months ago

The best money maker and tax saver would be to sell the public universities.

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finance 3 years, 11 months ago

To tanzer:

Of course not. A sale is one-time monies. And, with real estate being illiquid, it is money that can't be reached immediately--and in this economy--no time soon unless incredible luck is on the seller's side. And even after sold, you are right--then you begin handing back the proceeds realized from the sale in the form of lease payments which will one day exceed the initial sale proceeds. Bottom line--you're right--selling off paid-for assets to obtain one-time relief produces a headache later on.

The real answer is to quit pretending like there's a answer to a tax shortfall other than a genuine tax increase. Those fools who want to slash and burn need a severe lesson in civic responsibility--government is constructed to better people's lives, not to destroy lives and lifestyles through anti-civil actions. Certainly the tax decimation that has occurred in Kansas is as anti-civil as any I can think of short of physical persecution--on second thought, it is not a stretch to suggest that tax deprivation is a form of physical and mental persecution.

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Jackie Jackasserson 3 years, 11 months ago

Can someone explain how selling a building and leasing it back saves money. I can't seem to wrap my head around that. And is there really enough medicaid fraud to cover the budget gap?? REALLY???

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