Topeka Gov.-elect Sam Brownback and his allies say they don’t like the recent state sales tax increase and the federal stimulus dollars that came to Kansas.
But without those funds, Brownback, a Republican, would be facing a much worse financial situation in state government.
Instead, Brownback transitions into a job where the budget challenges are steep but not close to what they would’ve been without heavy lifting by Democrats in Washington and a bipartisan coalition in Topeka.
After a historic drop in tax revenue, for the first time in three years, state budget experts are projecting growth in collected taxes and a steadily improving economy.
“We’ve stopped dropping downward,” said State Budget Director Duane Goossen. “That’s really good news.”
In fiscal year 2010, which ended June 30, the state collected $5 billion. In the current fiscal year, state tax collections are expected to increase to $5.6 billion. Of that $600 million in growth, $300 million is attributable to a temporary 1-cent increase in state sales tax that took effect July 1.
That sales tax increase was pushed through by a coalition of Democrats and Republicans and signed into law by Gov. Mark Parkinson, a Democrat. It was made after several rounds of budget cuts. Supporters said the tax increase was needed to avoid permanent damage to schools, social services and public safety, while opponents said it would burden already hurting taxpayers and damage the economy.
The increase raised the state sales tax from 5.3 cents per dollar to 6.3 cents per dollar for three years. The tax is then scheduled to decrease to 5.7 cents per dollar.
Brownback made holding down taxes, freezing spending and reducing the state budget the foundation of his successful campaign for governor.
He criticized his opponent, state Sen. Tom Holland, D-Baldwin City, for voting for the tax increase, but Brownback says he has no intention of trying to repeal the levy.
“We need to hold our taxes down. I’m not proposing new taxes. I’ve not proposed taking the 1-cent sales tax off,” Brownback said.
“What I have said is we need to look at the overall tax structure in this state and see whether we’ve got the right mix of income, sales and property taxes, which I’m not convinced we have the right mix to have a pro-growth position,” he said.
Brownback and legislators are looking at significant budget problems in the coming year because of an increase in the number of Kansans who qualify for Medicaid and the end of the American Recovery and Reinvestment Act funding at the end of June 2011.
ARRA was approved by Democrats in Congress and included assistance to the states. Brownback, a U.S. senator, voted against the measure.
In Kansas, ARRA funds have been used in numerous ways, but mostly to prop up public schools and Medicaid expenses. The expiration of those funds will produce a nearly $500 million budget hole.
Brownback has said to fix the budget problems, the state’s economy must grow and the Legislature must look at the school finance fund because it makes up 55 percent of the state budget. But Brownback has refused to say what he means by that.
While Brownback hints at school funding changes, a coalition of school districts has sued the state alleging that recent cuts to schools are unconstitutional. The coalition has succeeded before in court, winning historic increases in school funding.