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Archive for Wednesday, March 7, 2012

Real estate agents asked to back Brownback plan

March 7, 2012

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— A Kansas Department of Revenue official emailed several real estate agents asking them to urge legislators to back elements of Gov. Sam Brownback's income tax plan that are broadly opposed by the real estate industry and that have failed to gain traction among lawmakers.

Chad Bettes, chief of staff for Revenue Secretary Nick Jordan, emailed six friends who are agents and members of the Kansas Association of Realtors, and he asked them to contact their elected officials and told them what specific points they should raise.

Included in the email, a copy of which was obtained by The Associated Press, was a letter stating why the sender backed the Republican governor's plan, including elimination of the state's home mortgage deduction and favored other tax changes.

Sherriene Jones-Sontag, the governor's spokeswoman, defended the communications as part of the administration's efforts to reach out to supporters of Brownback's agenda.

"Asking those who support the governor's agenda to reach out to their legislators is part of the legislative process, and we will work with allies to insure that such communications are factually accurate," she said.

The mortgage interest provision hasn't gained support among legislators, particularly in the House, where a bill is scheduled for debate early next week that would keep the mortgage deduction and make changes to the state's earned income tax credit for low-income taxpayers.

Rep. Nile Dillmore, the ranking Democrat on the House tax committee from Wichita, said he didn't see the administration's lobbying effort "working out for them in the end."

"It's more of an act of desperation to get the governor's plan up for discussion when there doesn't seem to be a lot of support for it," Dillmore said. "If the Department of Revenue is trying to carve out people who are opposed to particular points, they are going to be very busy."

The association has opposed eliminating the deduction since it was announced in January by Brownback, warning that it would be harmful to homeowners and an industry that has already seen sales drop by 28 percent since their peak in before the Great Recession, said Luke Bell, the group's lobbyist.

Bell said he received forwarded copies of the letter from individuals, who are among the association's 7,600 members. He's not upset that the administration is trying to sway the members' opinions, but doesn't think many will change their mind.

"I can't say that I'm surprised. They have the right to do so. We won't change our position," Bell said. "We think the numbers in the governor's proposal are damaging to homeowners."

The association is conducting its own public relations efforts, including calling homeowners about the proposed change and running newspaper advertisements. It is estimated that the average tax benefit to Kansas filers is nearly $390 per year.

Rep. Richard Carlson, chairman of the House Taxation Committee, said he wasn't aware of the administration's efforts but added that the tactic had been used on groups and legislators in previous years.

"I find nothing uncommon about that," said Carson, a St. Marys Republican.

According to the rules of the Kansas Governmental Ethics Commission, there is nothing in state law prohibiting agencies from lobbying for policies on behalf of the administration. An agency doesn't have to register as a lobbyist or disclose any of their activities, unlike a company or other organization advocating for certain policies or issues.

Chris Rost, a real estate agent in Salina, said he didn't receive an email from the administration, but that it wouldn't have changed his mind about eliminating the mortgage deduction. He's been an agent for 10 years and has seen the market rise, collapse after the Great Recession and now starting to stabilize.

"Consumer confidence is starting to get back in line with buying a home," Rost said. "You basically throwing a tax increase on a home that you're going to buy and mortgage."

Rost said surveys done by the association indicate that 80 percent of those asked disapprove of ending the deduction.

"We're not against tax reform, but we're one of the only advocates for homeowners and property rights," he said. "Yes, we also lobby to benefit our business, but we try to protect (homeowners) from unnecessary tax increases and taking property rights."

Comments

headdoctor 2 years, 5 months ago

Brownback is a piece of work. Does he really think he can get a bunch of real estate agents to commit hara-kiri against their lively hood. Stimulating the economy wont be easy if the bottom of the real estate market falls even more.

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KU_cynic 2 years, 5 months ago

Most Kansas taxpayers do not take itemized deductions such as for mortgage interest but instead take the standardized deduction, so most taxpayers would be unaffected by this. Mostly affluent taxpayers who do itemize will see a big cut in the tax rate under Brownback's plan that would offset the loss of mortgage interest deductibility. The realtors should not shed any crocodile tears for those folks.

The net effect of the plan on the housing market and home values would be negligible.

Think about it, do we really want to have tax incentives (even small ones) for affluent people to mortgage up or buy more home than their incomes would support? Aren't we already sowing the whirlwind from that kind of crazy?

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headdoctor 2 years, 5 months ago

You have any real figures to base your opinion on. It seems to me that several of those taking the standard deduction don't own homes. Most families have to itemized to maximize their deductions.

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KU_cynic 2 years, 5 months ago

60-70% of all taxpayers take the standard deduction nationwide. The higher the tax bracket, the more likely the taxpayer itemizes.

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JayhawkFan1985 2 years, 5 months ago

The income tax is a progressive tax. Property taxes and sales taxes are regressive. State policy should be to tax people with money, not people struggling to pay bills. the GOP and most particularly Brownback are interested in repealing the 20th century and protecting the financial interest of the super wealthy at the expense of ordinary Americans. It's disgusting.

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