Topeka — Advocates for children say they are getting hit on both sides of the ledger by Gov. Sam Brownback.
Brownback’s plan to overhaul the state tax code includes elimination of tax credits, such as the Earned Income Tax Credit, which is aimed at assisting low-income working families.
And the governor’s budget proposal for the fiscal year that starts July 1 assumes less than $40 million in funding for the Children’s Initiatives Fund. The Kansas Children’s Cabinet had proposed recommendations based on an anticipated funding level of $56 million.
Doing away with the EITC “flies in the face” of Brownback’s stated desire to reduce childhood poverty, said Shannon Cotsoradis, president and chief executive officer with Kansas Action for Children.
And Brownback’s reduction in funding in the Children’s Initiatives Fund “is a devastating blow for young children in our state,” Cotsoradis said.
Brownback, a Republican, maintains the state portion of the EITC should be eliminated because it is fraught with fraud and the dollars saved from the credit could be plowed into poverty programs that attract more federal dollars.
Brownback’s tax plan includes the elimination of numerous tax credits and deductions combined with lowering state income tax rates and reducing much of the taxes paid by tens of thousands of businesses. It would also make permanent a 6.3 percent state sales tax that was scheduled to decrease to 5.7 percent next year.
Brownback has argued his plan will spur economic development and create jobs, which will be good for Kansans of all income levels. But as criticism has mounted, Brownback has said he is open to different tax proposals.
Kansas Action for Children has argued that elimination of the EITC would throw 4,000 more children under the poverty line. Advocates for the poor have disputed the large-scale fraud allegation made against the EITC and say it is an efficient way to lower the tax burden of the working poor and help them pay their bills.
On the budget side, the KAC has expressed alarm about Brownback’s proposal for the Children’s Initiative Fund, which supports programs such as Early Head Start, the Infant-Toddler Program and Parents as Teachers.
The programs are funded through monies the state receives from the national settlement with tobacco companies.
But the governor says in his budget proposal that the funding is plagued by cash-flow problems and uncertainty.
“At issue is the timing between when the Legislature determines the budget and the receipt of the tobacco settlement payment,” Brownback’s budget recommendation says.
“By the time the state receives its payment, less than one-quarter of the fiscal year remains, at which point it is difficult to make adjustments in current year spending should the payment be less than was estimated. Because of ongoing litigation, a large portion of the state’s tobacco settlement receipts could be in jeopardy. It is the governor’s recommendation that the cycle of cash-flow problems be stopped by reducing proposed expenditures from the Children’s Initiatives Fund to fit a conservative estimate of tobacco settlement receipts,” it states.
But Cotsoradis said even if the funding comes up short, the Legislature can and should make adjustments.