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Archive for Friday, May 18, 2012

Latest tax cut proposal drives state budget to major shortfalls, according to projection

May 18, 2012

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— The proposed tax-cutting bill now under consideration by the Legislature would lead to significant budget shortfalls under certain scenarios, according to a new state projection obtained by the Lawrence Journal-World.

Up until now, Gov. Sam Brownback's administration and supporters of the latest tax cut proposal have said that even with the tax cuts, the state budget would maintain positive balances in future years. The proposed tax package would reduce personal income tax rates and phase out taxes on non-wage income of businesses.

But if the tax cuts were enacted, and legislators wanted to restore a small portion of recent cuts to schools, that would produce a negative ending balance of $408 million by 2018, according to the projection put together by the Kansas Legislative Research Department. The projection was composed at the request of legislators.

In another area of the budget, Brownback has proposed an overhaul of Medicaid, called KanCare, which he said will produce significant savings. But some legislators have doubted that assertion.

If the state fails to realize savings from implementation of KanCare, the state would have a negative ending balance of $895 million in less than six years.

Recently, the federal government has indicated it may take action against the state because of lengthy waiting lists for services for the physically disabled. If the state were to eliminate those waiting lists, the negative ending balance under the tax cut proposal would be $256 million in 2018.

Combing those three scenarios — an increase in school funding, the failure to realize savings from KanCare and eliminating the waiting lists — would result in a negative ending balance of more than $1.5 billion by 2018, the projection indicated.

Brownback and his team have said the tax cuts will increase economic activity. The plan is "a compromise that gets Kansas on the path to a pro-growth tax policy that will grow the economy and create jobs," Brownback said.

But opponents say they are concerned the plan will leave the state without the necessary revenue to meet critical services.

"The tax bill is way too large," said state Sen. Tom Holland, D-Baldwin City, and the lead Democrat on tax issues. "This leaves no money for additional services," Holland said. "We're just locking ourselves into major structural deficits," he said.

Brownback has said if the Legislature fails to approve the proposal, he will sign a larger tax cut bill that was sent to him earlier. That bill will produce deficits in the $2.5 billion to $3 billion range by 2018.

Comments

pace 1 year, 11 months ago

So Brownback has decided to cut the services before the veterans come home. It is like stabbing them in the back. Veterans, their families, children, the ill, education, working families, schools, secure police, parks, basic environmental protection. Our parents and the grandparents and the current population built Kansas into a caring and careful construction of services and infrastructure. Now Brownback is selling it off or destroying it to give giant tax cuts to the billionaires. Shame.

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George Lippencott 1 year, 11 months ago

Katara says: All your "tax" examples (brought to you by TurboTax!) involve a couple (a teacher married to a policeman) with 2 children. So it really seems more that you have an issue with people who have children who you perceive as getting all the "goodies". I am simply pointing out that your scenarios are inaccurate as they do not represent who is really not paying Federal Income tax.

Moderat Responds. Wrong! My tax examples included tax payers with no children. They also varied home ownership.

I think we have broken the Katara Code with the "goodies" remark. Apparently that is how you think - misdristribution of "goodies" The wife and I are getting plenty of "goodies" - the ones we worked to earn in 40 years of labor. Anybody could have earned them as our source is public employment.

As I have said before everyone should have skin in the tax game so that things they want cost them. There should be a limit on how much government can take from the middle class. Whatever the system it should apply to all - particularly the elites.

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tbaker 1 year, 11 months ago

Are taxes on the productive portion of society that ends up paying for everything ever called "draconian" or is that label only used to describe government spending cuts?

Speaking of, do the accepted uses of the term "fair" include situations describing the end of government programs, or is that another term only used in connection with raising taxes?

Just curious...

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George Lippencott 1 year, 11 months ago

Now where was I when I was so rudely interrupted by red herons?

  1. The state tax cuts are all but in law
  2. They will be devastating in 2013 unless
  3. New jobs just might happen with off setting tax revenue 4 OR we will have to raise taxes next session to avoid draconian cuts
  4. Since the budget is not yet final one can not tell whether there was an increase in social services or not for 2012. Most likely there still is.

AND 1. Seniors get no real special tax breaks - about half in Kansas live on SS (about $12K each which they paid to get and which leaves them in the ranks of the poor or near poor. 2. The poor and near poor pay considerably less in taxes (even as a percent of income) than the upper half of the middle class ($50K to 150K). If they have kids they pay no federal income tax at all. 3. The really rich of both political persuasions get a walk – paying about the same percent in taxes as people who make just one tenth of their income.

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George Lippencott 1 year, 11 months ago

Sorry Katara but I read it pretty much as you do but have a different understanding of how to intrepret it. I must admit it is not well writen and is confusing but!!!

The majority of people not paying federal income tax are those in the lower half of the middle class and the poor. The fact that some of those may be seniors should be no surprise. The fact that most of them are poor or near poor should be no surprise.

The article is silent on pecentages by age but IRS data and commerce department data reflects that many of our poor are also our seniors. The difference (albeit small) is that while the seniors pay little tax because they have little income the younger poor and near poor pay no tax if they have kids.

So what is your issue? People in the lower half of the middle class pay little or no federal income tax (old or young). Thta is exactly what I have written over and over again. Have you just figured out that despite social security many of our poor and near poor are seniors. Where have you been? Lost in that idelogical bubble you live in? Careful the older geese do not pay federal income tax either.

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Flap Doodle 1 year, 11 months ago

merrill, when was the last time you got thru two whole days without copy/pasting the same twaddle you posted at 11:29 on this thread?

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George Lippencott 1 year, 11 months ago

Bob_Keeshan (anonymous) replies… Which of your three groups has all the lobbyists at the statehouse, "

Moderate Responds: Bob you keep making the argument about the poor paying all the taxes. I keep asking for data. You never supply it.

I posted the total tax take (all taxes) on here based on Quicken tax retruns and the poor actually pay nothing except payroll taxes - if they work.

Taxes kick in with a vengence on the upper half of the middle class who by the time they make $100K are paying about 30% in direct taxes.. It is pretty flat after that.

What has that got to do with Brownback? He will reduce the income tax on the upper half of the middle class by maybe a few hundred dollars per year. The big earners already probably do not pay much Kansas income tax (capital gains and the like).. The real winners appear to be small businesses. Is it not Mr. Obama that wants to do the same thing for amall business?

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George Lippencott 1 year, 11 months ago

The sum of all above??

Government spending creates jobs! Private Spending is selfish Taxes are good - the more for government spending

Most state government spending goes either for long term investment (education) a good thing and for social services - bloated and inefficient with little return on investment.

The draft budget forthis year increases spending on education while suggesting management improvements to social services.

I though the notion of tax cuts at the state level was to make Kansas a more attractive location for companies that sell nation wide and internationally. If they move here jobs from elsewhere move here. Kansans get hired to do that work. We spend less on social services. We take in more tax revenue. We buy better education services and attract even more jobs and better paying jobs(instead of most of our college graduates with a degree in demand going elsewhere). This is not a zero sum game where tax cuts go to the rich and nothing goes to anyone else???

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George Lippencott 1 year, 11 months ago

Educate me. I thought those cuts were management related???

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nanimwe 1 year, 11 months ago

And don't forget that Brownback and the far right of the legislature are now taking money out of the Kansas Bioscience Authority. So that avenue of industry and job creation will very soon be defunct.

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pace 1 year, 11 months ago

Brownback's economic activity, working families taxes being diverted from state services, infrastructure maintenance and flying over to the Koch mansion, being used for landscaping and padding their portfolios.

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Hudson Luce 1 year, 11 months ago

Personally, I'm in favor of Brownback's plan to abolish the state income tax, because then - even if property and sales taxes go up to make up for the shortfall - voters will have more control in saying where those taxes go. It's a devolution of state power to localities - and I'm all for it.

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George Lippencott 1 year, 11 months ago

Well there is the option of cutting services and avoiding deficits. Since services appear to go to one set of citizens who generally pay little in taxes and much less so to the set of citizens that pay significant taxes maybe the latter are not bothered by the cuts??

Tax policy is a matter for the legislature and is in the end determined by those who show up at the polls. In reality if the courts were to rule again that more taxes are required for schools the legislature and governor could just ignor the ruling - they are independent and co-equal partners in government.

Seems to me there are a lot of assumptions in this space not supported by reality starting with the perception that one group has the right to take ever increasing resources from another group and award them to a third group without any real input from those paying the bills

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Crazy_Larry 1 year, 11 months ago

Cutting taxes for the rich does not build a strong economy. If it did, we'd be drowning in jobs right now. Nick Hanauer is an American entrepreneur and venture capitalist. http://www.youtube.com/watch?v=bBx2Y5...

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Richard Heckler 1 year, 11 months ago

Having two or three sources of income is not a bad idea. Why? There are at least 7 reasons to keep in mind.

  1. Mergers
  2. Hostile Takeovers
  3. Leveraged Buyouts
  4. Free Trade Agreements
  5. Reagan/Bush Savings and Loan home loan scandal which killed the economy and cost the USA millions of jobs.
  6. Bush/Cheney Home Loan scandal killed the economy and cost the USA millions of jobs
  7. Gov Sam Brownback because he has brought the above beltway thinking to Kansas aka Reaganomics = Wreckanomics.

All of above ultimately translate into millions upon millions upon millions of USA job losses.

If one has the dollars becoming a career student is as respectable as any other job. Yes stay in school to avoid the depression associated with no jobs available to college grads.

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yourworstnightmare 1 year, 11 months ago

I agree with much of what has been said. Brownback's and the conservative's plans for Kansas will turn it into an impoverished, uneducated, unemployed state with little or no middle class and no culture or innovation.

The philosophers among them see it differently; that their actions will create a "Randian" paradise, where intelligent and successful "job creators" will be unleashed and freed to build a prosperous, thrifty, productive and innovative society in Kansas. In other words, faith-based economics, voodoo economics.

Let's look at the most "Randian" figures in our state, the Kochs. When they choose to donate money to philanthropic organizations, where do they go? To Kansas? Oh, no. The Kochs choose high-tax, liberal states like Massachusetts and New York for their philanthropy. States that invested in education and business, not attempted to eradicate education and culture as the current crop are trying to do here in Kansas.

The current efforts in Kansas to slash taxes and thus state spending will turn Kansas into an innovation, educational and cultural waste land. A wasteland where no Randian innovator/job creator could be successful even if he or she wanted his or her family to live here.

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Hudson Luce 1 year, 11 months ago

Brownback is a closet anarchist - he's doing everything possible to smash the state! Give the man a black hoody!

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wastewatcher 1 year, 11 months ago

Why does the LJW continue to quote LIBERAL LOSER TOM HOLLAND when he was so soundly defeated at the polls. Remember the voters spoke loud and clear and did not like what Holland was offering.. It is time for the LJW to quote reasonable people not yesterdays losers!!!!! l

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Richard Heckler 1 year, 11 months ago

Now how many jobs have all of the etitlements listed below created? Can we say negative 20 million?

  1. ENTITLEMENT - TABOR is Coming by Grover Norquist and Koch Bros sells out state governments, public schools,SRS services etc etc to private industry = Grab Your Wallets! http://www.dollarsandsense.org/archives/2005/0705rebne.html

  2. ENTITLEMENT - Bailing out The Reagan/Bush Savings and Loan Heist aka home loan scandal sent the economy out the window costing taxpayers many many $$ trillions (Cost taxpayers $1.4 trillion), Plus millions of jobs, loss of retirement plans and loss of medical insurance. http://rationalrevolution0.tripod.com/war/bush_family_and_the_s.htm

  3. ENTITLEMENT - Bailing out the Bush/Cheney Home Loan Wall Street Bank Fraud cost consumers $ trillions, millions of jobs, loss of retirement plans and loss of medical insurance. Exactly like the Reagan/Bush home loan scam. Déjà vu can we say. Yep seems to be a pattern. http://www.dollarsandsense.org/archives/2009/0709macewan.html

4.ENTITLEMENT - Bush/Cheney implied many financial institutions were at risk instead of only 3? One of the biggest lies perpetrated to American citizens. Where did this money go? Why were some banks forced to take bail out money? http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year

  1. Tax cuts = the ENTITLEMENT program for the wealthy which do nothing to make an economy strong or produce jobs. Tax cuts are a tax increase to others in order to make up the loss in revenue = duped again.

Still A Bad ENTITLEMENT Idea – Bush Tax Cuts aka The ENTITLEMENT program for the wealthy at the expense of the middle class = duped one more time. http://www.dollarsandsense.org/archives/2001/0301miller.html

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Patricia Davis 1 year, 11 months ago

Brownbackistan is not going to a pretty nor a productive place. Who would want to come to Kansas either to invest in a business or even tourism? And a retirement mecca? Bella sera my a$$!

In the spirit of "A Modest Proposal", we left of right wingnuts, should voluntarily go west and do hand to hand combat, taking over the precincts and replacing god's chosen ones with people who love Kansas. People who are willing to compromise for what is best for the people who live and work here. People who care about their children's education, a compassionate safety net, safe roads, clean water and a healthy environment—yes, and a healthy, competitive business environment that is not subsidized by the poor and middle class.

Brownback's slash and burn governing style combined with his non-think voodoo economics will cripple this state for decades. Perhaps forever.

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tomatogrower 1 year, 11 months ago

Don't forget the "fiscally responsible" guys in office now, who are wasting tens of thousands of dollars a day protecting us from a bogey man, because they have no idea of what the words autonomy and US constitution mean, and can't do their real job of budgets and districting maps. I feel so much safer from Sharia law and peace keeping UN troops who want to confiscate my car, oh my. What is that violin I'm hearing, and do I smell smoke? Republican radical conservative: "Just move along. Nothing to see here."

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esteshawk 1 year, 11 months ago

The problem with job creation in Kansas is not the tax structute, but the social structure. Corporations want well educated workers in a solid location where they can lure top execs. In this day and age when workers can live anywhere, Kansas is making a collective fool of itself and re-enforcing every negative stereotype out there. You think tech companies want to move to Ks? Manufacturing is over. How effective were these policies in keeping Boeing in Kansas? Cognitive dissonence is staring Kansas in the face, and half of you don't even know it.

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larrygin 1 year, 11 months ago

This comment was removed by the site staff for violation of the usage agreement.

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kansanjayhawk 1 year, 11 months ago

Just amazing how upset the liberals are because they actually are going to have to give Kansans tax relief. They surely would have loved to make their exit with no tax cut at all...i'm waiting for Senator Holland to offer a plan...hasn't happened yet!

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Alyosha 1 year, 11 months ago

Food for thought, from the recently non-posted TedTalk: "If the typical American family still got today the same share of income they earned in 1980, they would earn about 25% more and have an astounding $13,000 more a year. Where would the economy be if that were the case?"

http://www.theatlantic.com/business/archive/2012/05/here-is-the-full-inequality-speech-and-slideshow-that-was-too-hot-for-ted/257323/

The real issue is, of course, that consumers (the demand side of the economics equation) even when employed have generally fared poorly under Republican supply side policies. And our continuing un- and under-employment is clear evidence of that.

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JackMcKee 1 year, 11 months ago

What's Brownback's next scheme going to look like? Let me guess, the state will sell out to Kochs and the poor and middle class have to write checks to them to rent a spot to live. It can only get crazier from here on, folks. Welcome to serfdom circa 2012!

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Paul R Getto 1 year, 11 months ago

A little META data for your consideration:

Graphic inspired by Jennifer Granholm's Politico Opinion piece: http://www.politico.com/news/stories/0512/76338.html

Grenholm got her information from this Bloomberg research piece:

http://www.bloomberg.com/news/2012-02-22/stocks-return-more-with-dem-in-white-house-bgov-barometer.html

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Alyosha 1 year, 11 months ago

Rather than so-called tax relief, the better course would be to increase workers'/consumers' income, which has stagnated over the last decades. In a consumer economy, if consumers have no money, they cannot fuel economic growth.

Workers / consumers are, and always have been, the "job creators," since it is only increased demand that ever fuels economic growth.

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Cant_have_it_both_ways 1 year, 11 months ago

Could it be that the reason most of you in here don't have anything is because you just don't understand how things work?

Cutting taxes is a very good thing, and the absolute best thing to spur the economy, which in turn, creates job opportunities.

The problem is the spending everywhere from the State to your kitchen table. The secondary problem is the very over bloated entitlement system.

A combination of cutting taxes, cutting spending, and cutting entitlements will start not only the State but your household into a period of economic growth.

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Richard Payton 1 year, 11 months ago

I thought these wealthy corporations needed workers. More workers needed for Kansas that are willing to pay the taxes for corporations. Is this the message we want to send?

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JackMcKee 1 year, 11 months ago

Just scrap it. There is absolutely nothing wrong with old Kansas tax system except property taxes are too high.

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Alyosha 1 year, 11 months ago

Businesses hire new workers when demand for their services / products require it. Without demand for a businesses services or products, or even the reasonable projection of growth in demand, no business is in a position to hire more people.

So the question must be: how do you increase demand? Republicans have no answer.

We have tried "supply side" economics for 40 years and those policies have given us high unemployment and stagnant earnings for the middle class. It's time to admit our mistakes and return to the kind of bipartisan economic policies that fueled mid-century Amrican growth and prosperity. Read up on the tax code under Eisenhower to see how far we've gotten away from sound tax policy.

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1 year, 11 months ago

Kansas is headed to the crapper with this "Great leadership". Whatever happened to moderation. Far Right and Far Left politicians need to think of the people not themselves. Just do your job.

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jhawkinsf 1 year, 11 months ago

I find it interesting that while we here are talking about tax cuts creating a budget deficit, California has a very high tax burden and they currently have a huge budget deficit. Perhaps the correlation between the two that seems so obvious is in fact less obvious than it seems.

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sierraclub 1 year, 11 months ago

Maybe, just maybe, the state could cut expenses. Not enough jobs? How many illegal or undocumented workers are in the state of Kansas taking away Kansas jobs? We as a soceity cannot have it both ways. Do we have 100,000 illegal/undocumented workers and 100,000 on unemployement? Seems to me that the problem is staring right at us. But sure, lets blame it on the working people and keep their taxes high.

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Alyosha 1 year, 11 months ago

If tax cuts created jobs, given all the tax cuts in recent years, we'd be at full employment. Why do Republicans insist on asserting something -- that tax cuts lead to jobs -- which is demonstrably false? And republican voters, why do you continue to believe what Republican politicians say when the clear evidence in front of your eyes -- not enough jobs for workers -- proves otherwise?

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