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Archive for Thursday, March 17, 2011

Statehouse Live: House defeats bill to repeal temporary 1-cent state sales tax increase

March 17, 2011, 2:08 p.m. Updated March 17, 2011, 8:31 p.m.

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— In what was dubbed “tax day,” many conservative Republican House members on Thursday voted to repeal the temporary 1-cent sales tax increase that was approved last year. But that effort failed.

Then many of them voted with the Kansas Chamber of Commerce to make the sales tax increase permanent and use it to help phase out the corporate and individual income tax. That failed too.

Rep. Lance Kinzer, R-Olathe, urged the House to repeal the sales tax increase.

“We need to undo the mistake,” Kinzer said, arguing that the increase has hurt businesses, especially those on the Kansas border near Missouri.

He also said the November election, which increased the House Republican majority to 92 members — the largest in more than 50 years — signaled voters wanted to get rid of the tax increase.

But supporters of the tax increase said it was needed to avoid destructive cuts last year, and if it were repealed would deepen the current budget deficit of $500 million to $900 million. The bill to repeal the increase failed, 39-80.

Gov. Sam Brownback, a Republican who was elected in November, has criticized the sales tax increase but said he didn’t want it repealed.

Last year, the Legislature increased the state sales tax from 5.3 cents per dollar to 6.3 cents per dollar with a portion of the increase helping to pay for the new state transportation plan.

Under the law, the state sales tax will decrease to 5.7 cents per dollar in 2013.

Later, the House considered a bill, sought by House Republican leaders and backed by the Kansas Chamber of Commerce, that would have made the 6.3 cent sales tax rate permanent and used revenue from it to phase out the corporate and individual income taxes.

Rep. Richard Carlson, R-St. Marys, and chairman of the House Taxation Committee, said the proposal would attract more businesses and base more of the tax structure on consumption instead of productivity.

But opponents saw it as a way to starve government funding of crucial services and shift more of the tax responsibility onto poorer Kansans.

Rep. Jerry Williams, D-Kansas City, described it as “Robin Hood in reverse,” arguing the higher state sales tax rate hurts the poor because the tax is applied to essentials, such as food. That bill died 56-61.

The House did advance a bill that allows businesses to deduct from Kansas net income the cost of certain business and machinery.

Comments

jhawkinsf 3 years, 6 months ago

The surest way to make a tax permanent is to label it temporary.

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iLikelawrence 3 years, 6 months ago

Having moved from Lawrence to WyCo I'm now going across the state line to buy groceries or other large purchase items that makes a noticeable difference in the total. The Legends special tax rate makes even worse. Negate it by spending on the gas? Maybe but when gas is cheaper in Mo then I'm doing more things to make it worth the trip.

I could stand the increase in tax if it wasn't applied to groceries. 4.5% tax on groceries in Mo, vs %9.4 in Ks. With coupons and the 5% difference it makes 'cents'.

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FieldTested 3 years, 6 months ago

I respectfully disagree - it does not make sense (or cents). You get zero benefit from any taxes you pay in Missouri. But you are still going to pay for the services provided by Kansas and Lawrence, if not through sales tax, then through higher property taxes, increased user fees, and other increased costs for services. Or maybe you won't get the services, in which case you'll pay through increased wear on your vehicle from unrepaired potholes, decreased earnings for your children because of eroding educational standards, lowered safety because the police are dealing with the mentally ill people who used to have state services, etc.

The money you spend in Missouri does not help pay for your neighbors' salaries, lowering their ability to buy housing, so your property value falls.

And, as you say, figure in gasoline to drive 80 miles - around $10-15 (cheaper gas that you wouldn't have had to buy doesn't really count in the equation). Add the $10 for wear & tear on your car for the journey.

You would need to buy $400 in groceries to break-even on the direct costs through tax savings, and there would still be the costs to yourself and your community of taking your dollars to another state to account for.

It seems "cents" wise, dollar foolish to me.

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iLikelawrence 3 years, 6 months ago

Well first off 80 miles roundtrip is a foolish exaggeration.

Second, 'neighbor's salary' makes me think you're a public employee.

Third, it's my money.

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FieldTested 3 years, 6 months ago

Even if you live out on the east side, the round trip to 103rd & State Line (the closest grocery store in MO) is 70 miles. If you live in central Lawrence, and go to any other grocery in KC, 80 is reasonable.

I work in private industry, as do my neighbor's. When I spend my money in Lawrence, I often hand it to people I know.

You are absolutely correct, and I would always defend your right to spend your money where you want to. I was suggesting that spending money in MO on products that are readily available in your hometown has negative financial repercussions for you, and other residents, that are not obvious.

I like Lawrence too.

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Steve Jacob 3 years, 6 months ago

"Gov. Sam Brownback, a Republican, has criticized the sales tax increase, but has also said he didn't want it repealed."

Just sounds funny. It's called having you cake and eating it to.

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kansanjayhawk 3 years, 6 months ago

Where are our "fiscal conservatives" we thought we elected? This tax should be repealed it is an affront to the citizenry to leave it in place and it is disgraceful that the GOP failed to do the right thing.

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TheStonesSuck 3 years, 6 months ago

kansasjayhawk, they were trolling you!!! They've obviously been too busy legislating reproductive health (obviously qualified), making sure Sharia law doesn't come around (cuz it was close), etc., etc. They've humiliated the state of Kansas. We are once again a laughing stock. The Phelpses' are an embarrassment, but at least they hold no real power. Kansas is beautiful, it's just the people are ugly.

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TheStonesSuck 3 years, 6 months ago

because the colonists were against taxation without representation. See this little thing we've got going called a government? It provides a lot of the stuff we use everyday... and it isn't free. We have 300 million people in this country, most of whom pay taxes... if you want to see how things are with no taxes, move to Somalia, Gambia, or the Congo. Or you can disappear into the jungle...either way, you'll be missing paved roads, police, ems workers, etc. I don't see why people get so freaked out about taxes, we all pay them. Taxes are part of human nature believe it or not. IF YOU EXPECT SOMEONE TO PROVIDE SERVICES TO YOU, IT COSTS MONEY. Seems fairly straightforward to me.

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kinder_world 3 years, 6 months ago

According to Forbes.com - On the state level, the highest percentage sales tax increase was in Kansas, which raised its sales tax by 19% from 5.3% to 6.3%. Too many new taxes, too many new fees (new word for taxes). Taxes that fall disproportionately upon the poor and increasingly more on the middle class. Just say no. Live within the funds available until the economy stabilizes.

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