Topeka — The debate over state spending and taxes intensified Friday as financial experts released new revenue forecasts for Gov. Sam Brownback and the Legislature to use in forming a budget for the next fiscal year.
State revenue estimators signalled cautious optimism for the economic road ahead, revising upward by $200 million the expected revenue in the current fiscal year from about $6 billion to $6.2 billion. Slow growth is expected to continue in the next fiscal year, bringing the state $6.3 billion in receipts.
“Overall, the economic outlook assumes continued growth in the Kansas economy,” said Alan Conroy, director of the Kansas Legislative Research Department.
Gov. Sam Brownback’s budget director, Steve Anderson, sounded a more cautious tone, saying that nearly half of economists are warning of a possible “double-dip” recession.
“The real issue is we still have so much uncertainty,” Anderson said.
But in recent months, state coffers have received healthy hikes in revenue based on increased receipts of personal income tax and sales tax, officials said.
At the current pace, the state will have an ending balance on June 30, 2012, of nearly $320 million — a far cry from the nearly zero ending balance of a year ago.
Brownback issued a statement on the new revenue figures, saying, “The latest revenue projections show the power of economic growth and controlling spending. It proves the long-term solution for our state involves more jobs and limited government.”
Whether the increased revenue is used to fill in Great Recession budget cuts in education, social services and public safety, or used to provide tax cuts, will be the main fight of the legislative session that starts in January.
Brownback and the state income tax
On the tax front, Brownback supporters hit the highway on a bus tour campaigning for abolishment of the state income tax.
“The only way to spur economic growth is to eliminate the income tax,” said Ashley McMillan, president of Kansans for No Income Tax.
The Kansas group, partially funded by a Missouri billionaire and using a bus with an Alabama license tag, started its tour outside the Statehouse and planned stops in Leavenworth, Pittsburg and Wichita.
Brownback, a Republican, did not appear at the Topeka event, but his chief of staff, David Kensinger, did. Kensinger said he showed up because he was promised hot chocolate.
Brownback has said he wants to reduce the state income tax and his administration is working behind closed doors to propose a major tax overhaul for the 2012 legislative session.
Brownback, and Kansans for No Income Tax, say getting rid of the levy will spur economic growth, similar to Texas, which doesn’t have a state income tax.
Cuts to schools felt as enrollment increases
But Democrats and some Republicans say eliminating the state income tax will force increases in other taxes, cuts in services, or both. They also say Kansas shouldn’t follow Texas’ tax policy since Texas lags behind Kansas in many quality of life areas, such as education, roads and social services.
The issue is likely to be one of the most contentious of the upcoming session. Eliminating the state income tax would take a huge chunk out of state revenue.
In the last fiscal year, Kansas brought in about $5.9 billion in tax revenue. Of that amount, about $3 billion came from state income taxes — about $2.7 billion from individual income taxes and the rest from corporate income taxes.
Meanwhile, the Kansas Department of Education released a report showing that state budget cuts to public schools have resulted in fewer teachers and more-crowded classrooms.
The total number of teacher positions statewide in the current school year is 34,075.
That is a drop of 256 from last year and 1,363 since the 2008-09 school year total of 35,438.
Meanwhile, student enrollment has increased from 473,097 in 2008-09 to 482,798 in the current school year. That is an increase of 9,701 students. During that time, the Lawrence school district grew from 11,007 students to 11,613 students, an increase of 606 students.
The elimination of teacher positions coincides with cuts to school funding.
In the 2008-09 school year, base state aid to public schools was $4,400 per pupil. That figure is now $3,780 per pupil following several rounds of cuts, including the latest one of $232 per pupil approved by Brownback.
House Democratic Leader Paul Davis, of Lawrence, said he hoped the increased revenue figures would persuade Brownback to help schools.
“It is encouraging to see that the Kansas economy is on the uptick. Earlier this year Gov. Brownback made the largest cut to Kansas schools in state history. I hope he will see this as an opportunity to renew our commitment to public education so that our children will have a competitive advantage in the 21st century economy,” Davis said.
Tax-cutting group has out-of-state ties
But Kansans for No Income Tax focused on cutting the budget.
Outside the Statehouse visit, about 35 people gathered, mostly Republicans and Republican staff members.
Reps. Richard Carlson, R-St. Marys, who is chairman of the House Tax Committee, and Joe Patton, R-Topeka, spoke, as did Dave Trabert, president of the Kansas Public Policy Institute, and representatives from FairTaxKC.
It was reported in recent days that Missouri anti-tax billionaire Rex Sinquefield has contributed to Kansans for No Income Tax. Sinquefield and McMillan have refused to say how much he contributed.
“We enjoy support from folks in Kansas and like-minded folks throughout the United States, and we are very pleased with that,” McMillan said.
When asked why the Kansans for Income Tax bus has an Alabama tag, McMillan said, “That’s the bus that was available to us.”
During the 2010 gubernatorial campaign, Brownback was criticized by some for leasing a campaign bus from an Alabama company for use on his campaign.
Comments
William Weissbeck 2 years, 5 months ago
You guys and gals on the right want a taste of reality (as opposed to your flat earth world of unicorns)? Check out MSNBC's story and pictures today of schools housed in buses coming to the poor of India. Last I knew, India was both capitalist and a democracy. What it lacks is a social contract that says there are certain fundamental services like a free public education that are the cornerstone to equalized opportunity in a society. Because you on the right do not accept that, I cannot trust that you would not let the US fall to the level of India.
yourworstnightmare 2 years, 5 months ago
jhawkinsf,
You are seeing things in my post that are not there. You accuse me of lamenting the fact that businesses will only create jobs if they are assured they will make money.
You are assuming I feel this way, but let me assure you it is not the case. The purpose of a business is to make money.
What is foolish is to expect that by giving businesses more money that they will automatically create jobs. They will not, nor should they.
The way to stimulate the economy and to get businesses to spend money on jobs is to increase demand for their products. This means more money in consumers' pockets. This can be done by reducing taxes on consumers or by stimulus spending.
Giving the wealthy and corporations more money in the form of tax breaks will not create jobs, as they would be foolish to spend money on jobs in the absence of demand.
Dan Eyler 2 years, 5 months ago
Will someone please raise my taxes at least 25% so that I can take care of all these people. Would someone also go ahead and tell me what would be a fare tax for each of us to pay. After all the rich use to be above $250,000 according to our president. But that number has since dropped to $200,000 and that only took 3 years to go from 250,000 t0 200,000. So if I was lucky enough to make $200,000 a year would someone tell me what a fare tax would be. If I make $40,000 a year and my wife makes $40,000 a year what would be a fare tax? I mean already nearly 50% of everyone who has blogged here is pay no federal income tax. I don't think that is fare at all. Why do you get to keep all of your money and take advantage of most of the government assistance at the same time?
LJ Whirled 2 years, 5 months ago
The peasants are starving, the merchants are rising up ... but the palace sure looks nice.
Idea: Sell the bleeping statehouse and governor's mansion and meet in a bleeping vacant building ... there are plenty in downtown Topeka.
Really. Do we need a palace in which to wring our hands about being broke?
Centerville 2 years, 5 months ago
6 states are in good shape, financially. Some have an income tax, some have a sales tax. None have both.
sciencegeek 2 years, 5 months ago
Actually, what it shows is the general contempt that individual has for Kansans in general. He is getting a certain Johnson County business, to which he has ties, state contracts all over the place, for which he will prosper, and get his jollies by laughing at the poor Kansas suckers at the same time. He's extremely proud that Pat Roberts calls him the "Machiavelli of Kansas politics"; it's on his website. Sadly, he reflects the attitude of the whole Brownback administration. We're super-screwed.
jhawkinsf 2 years, 5 months ago
"They will only spend money on jobs if they know there will be a demand for their product". Duh.
That sentence alone has to be the most ironic statement I've ever seen. Not because it's untrue. Just the opposite. It's so obviously true that I can't imagine anyone would doubt the truth of the statement. Yet, "yourworstnightmare" has made the statement as if it shouldn't be true. Tell me the statement was made in jest, please. Tell me I didn't "get it". Otherwise it has to be the dumbest statement in this forum in.... forever. (And there have been some pretty dumb statements made here).
yourworstnightmare 2 years, 5 months ago
Corporations and banks are sitting on record amounts of cash, and yet no jobs are being created.
Why would giving them more money change anything?
Jobs are an "expense" to a business. They will only spend money on jobs if they know there will be a demand for their product.
The problem with our economy is lack of demand, lack of spending, lack of buying, because people have no money. Businesses will not start creating jobs until the demand returns.
Therefore, stimulus on the demand side is required, in the form of tax reductions or spending on infrastructure.
Jimo 2 years, 5 months ago
“The only way to spur economic growth is to eliminate the income tax,” said Ashley McMillan, president of Kansans for No Income Tax.
Mr. Rothschild: did Ms. McMillan giggle after making this asinine claim?
Is this the same Ashley McMillan whose experience is not as an economist (or even businesswoman) but as Pat Roberts' election adviser?
No one with more intelligence than Herb Cain would claim that you can "spur economic growth" by cutting taxes on the wealthy (even more) and shifting that burden to the poor and middle class.
Ms. McMillan is welcome to her religious faith in anti-tax mumbo jumbo but her expertise in the realities of macroeconomics, budgeting, taxation, etc. would be precisely Zero. (Was there not an elephant at the zoo that was available for quotation on this topic?)
Jimo 2 years, 5 months ago
“The real issue is we still have so much uncertainty,” Anderson said.
No, the real issue is that we lack demand. Econ 101, Day 2.
Dave Trabert 2 years, 5 months ago
Here are some facts that are missing from the article. Teacher employment is still growing faster than enrollment since 2005...+4.6% vs. 3.1% enrollment statewide through 2011. All other district employment is up 8.6%. We...Kansas Policy Institute...have the data posted at www.KansasOpenGov.org under school district
vuduchyld 2 years, 5 months ago
Welcome to Brownbackistan, it's where Kansas used to be Welcome to Brownbackistan, it's our new theocracy! Brownback and Koch call all the shots, we're governed by the rich The wealthy all get wealthier and the rest can all eat #$%#
http://www.youtube.com/watch?v=SLUfNPdirdE
George Lippencott 2 years, 5 months ago
see:
http://www2.ljworld.com/weblogs/loyal-opposition/2011/nov/5/austerity/
yourworstnightmare 2 years, 5 months ago
Get ready, folks.
This has a great chance of happening, because right now, Brownback has the power of a dictator in this state.
The legislature is in his thrall, as are apparently a majority of the people of Kansas.
Eliminating the income tax is a bad idea. Why do we want to be more like Texas, which lags in nearly every quality of life indicator? Plus, they have a huge advantage with population and natural resources.
Wake up, lower and middle income Kansans. No income tax will be bad for you and nearly every other Kansan.
This isn't about abortion or guns or god or gays. This is about your economic futures.
keith manies 2 years, 5 months ago
Has Governor Sam Brownbackwards and his radical right wing supporters in the legislature lost their minds?! Do they sincerely believe that eliminating the state income tax during these hard economic times will somehow lead Kansas to prosperity?! With support from the Koch Brothers funded ALEC and outside the state billionaires, obviously the answer is YES. This is voodoo economics at its WORST and will lead our fair state down an unpaved and rocky road to RUIN! Imagine Kansas 10 years from now if this comes to fruition; a Kansas with horrible public schools & state universities, little or no state support for the developementally disabled, arts & culture, tourism, and a hundred other important programs. It will be a Kansas few will want to live in and a major laughing stock of the country. A Kansas that has been destroyed by politicians who do NOT serve the people, but serves corporate and billionaires' interests.
KEITHMILES05 2 years, 5 months ago
Free hot chocolate? What a shameful, iditiotic, and stupid thing to say even if true. Nothing like our tax dollars paying the chief of staff for Ks. governor to attend an event only for hot chocolate. This is exactly what citizens in this country are so angry about is the outright abuse and high mindedness of those in the political process. You should be ashamed of yourself sir!
parrothead8 2 years, 5 months ago
If a free cup of hot chocolate gets the Governor's chief of staff to show up at your rally, can you imagine what he'd do for millions of Koch dollars?
question4u 2 years, 5 months ago
30% of Texans think that human beings lived at the same time as dinosaurs, and another 29% don't know one way or the other. (http://www.texastribune.org/texas-education/public-education/texans-dinosaurs-humans-walked-the-earth-at-same/)
Texas made plans to lay off 100,000 teachers but at the same time to provide $25 million in subsidies to Formula One racing. (http://www.theroot.com/buzz/texas-layoff-100000-teachers-while-pumping-millions-formula-one)
The Science and Engineering Readiness Index (which "reflects how well states perform and allow opportunities for success in physics and math education and teacher qualification") ranks Kansas at 16 and Texas at 31. http://www.huffingtonpost.com/2011/07/11/state-education-rankings-_n_894528.html
Texas has been able to support better universities than Kansas because of the Permanent University Fund, which directs millions each year to Texas universities from gas, oil, sulfur and water royalties and grazing leases on state lands. (http://en.wikipedia.org/wiki/Permanen...) Texas universities can get by without revenue income taxes, but Kansas universities do not have the benefit of a Permanent University Fund.
Ashley Macmillan, Rex Sinquefield and Sam Brownback are pushing to make Kansas K-12 education as poor as it is in Texas. They would be perfectly happy to see the quality of higher education in Kansas ( which does not have any universities in the national top 100) continue to decline.
You don't get something for nothing. If there's anyone who thinks that eliminating the state income tax wouldn't have a devastating impact on public education, Texas has some beautiful swampland to sell you.
Dan Eyler 2 years, 5 months ago
Schools need radical change that fits the 21st century economy. Preparing students to enroll in psychology and sociology to name a few, is a path to failure and joblessness. Teachers who want to use the unions to fight their battles for higher pay at the same time they fight competition is no longer a workable solution. The taxpayer can no longer be seen as the source of a teachers paycheck. We must have at least a 50/50 mix of both private and public sources of money. I want teachers and union members to hear this single taxpayer. I will not vote for you to have any more of my tax dollars unless you make dramatic changes. I will not vote for any more bond issues, nothing that will increase the old style of the this 19th century method of funding, paying and teaching our students. I know there are many educators who agree with me on this. But we know also that the old guard and union reps see these tax dollars as another entitlement for the profession. It isn't the legislature or taxpayers like me who are causing funding issues in schools and low pay for teachers, its the unwillingness of teacher organizations who are afraid to compete. When the taxpayer has always been your only source of income for everything in your lives, it's tough and scary to break that bond and enter the real world.
Bob_Keeshan 2 years, 5 months ago
The only place where half of all economists think there will be a double dip recession is a room where Steve Anderson considers himself an economist and is having a conversation with an actual economist.
Only politicians are still making this claim.
tortise 2 years, 5 months ago
Ignoring the inequities in the Kansas property taxes as they move forward on a new school finance formula will kill our rual communities, especially the very ones who got the ROZ designations last session -Rural Opportunity Zones. Older folks on fixed incomes cannot afford to stay in these communities and one of the few economic opportunities - services for our elderly will dry up and the youth will have no market to encourage their moves to these ROZ communities. A house is something that unlike crop land doesn't produce income and won't grow in value in these communities. Don't raise more money from property taxes, just move it around and make it more fair. Kansas Farm Bureau - do you really care about rural economic development????
mloburgio 2 years, 5 months ago
Privatizing Public Education, Higher Ed Policy, and Teachers Increasing Profits for School Companies, Undermining Teachers, and Promoting "Conservatives" on Campus This page reveals how ALEC bills would privatize public education, crush teacher's unions, and push American universities to the right. Among other things, these bills make education a private commodity rather than a public good, and reverse America’s modern innovation of promoting learning and civic virtue through public schools staffed with professional teachers for children from all backgrounds. Through ALEC, corporations have both a VOICE and a VOTE on specific state laws to change the American education system. Do you? ALEC Exposed http://alecexposed.org/wiki/Privatizing_Public_Education,_Higher_Ed_Policy,_and_Teachers
patgilbey1 2 years, 5 months ago
education is right behind a balanced budget. Kudos to Brownback and staff for making difficult financial decisions. Now focus on education. I am sure it is more cost effective to pay for good education than remedy bad habits of crime and deliquency.
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