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Archive for Monday, September 24, 2012

Brownback brushes up story supporting tax cuts

September 24, 2012

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— Gov. Sam Brownback’s administration already has developed talking points to deflect anticipated criticism of the newly enacted massive income tax cuts should Kansas face significant budget problems next year.

Critics said their fears about the aggressiveness of the cuts were confirmed by the conservative Republican governor’s budget director in July, when he told state agencies to draft proposals for slicing up to 10 percent of their spending.

Brownback and his allies argue that the tax cuts will stimulate economic activity, generating new tax revenues to more than offset what the state gives up. The governor concedes that economic growth may lag and the state may face some belt-tightening, but he says core services will be preserved.

The administration is fashioning a narrative that suggests budget cuts may be necessary because the nation’s economy may remain stagnant. Europe’s financial crisis also looms as a potential threat.

“There are forces beyond the state’s control,” Brownback spokeswoman Sherriene Jones-Sontag said last week. “There’s still a great deal of uncertainty with the economy.”

The state is decreasing its individual income tax rates for 2013, with the top rate dropping to 4.9 percent from 6.45 percent. Also, the state will exempt the owners of 191,000 partnerships, sole proprietorships and other businesses from income taxes.

The Legislature’s research staff projects that the tax cuts will be worth $231 million during the current fiscal year and increase to more than $800 million during the next fiscal year. The collective tax relief over the next six years is estimated at more than $4.5 billion.

The same legislative researchers project that the tax cuts will create collective budget shortfalls approaching $2.5 billion over the next six years.

Early fallout

Brownback’s aides described July’s budget instructions as a planning tool, but signs that significant cuts are a possibility keep popping up. The Department of Commerce announced last week it was ending its long-running Kansas Main Street program — which provided money and support for communities to help preserve small downtown businesses — trimming 18 jobs.

During a state Governmental Ethics Commission meeting, Executive Director Carol Williams warned that one of two staff auditors was at risk of being laid off, and said administrators in other agencies are certain that 10 percent cuts are imminent.

“The biggest force driving his budget problem is the tax cut,” said Kansas Democratic Party Chairwoman Joan Wagnon, a former state revenue secretary, said of Brownback.

Growth potential

Brownback and his allies have argued repeatedly that the projections are too pessimistic about future revenue growth that would come from a boost in economic activity, particularly small businesses.

“This plan simplifies their taxes and helps business owners retain more of their profits, which can then be reinvested in their livelihood or the community,” Revenue Secretary Nick Jordan said in a statement earlier this month.

The administration sees the potential growth to be too promising to reverse course, even when faced with the possibility of trimming the budget.

Still, raising questions about the national or global economy could help the administration as it defends the income tax cuts. The post-9/11 recession in 2002 largely shielded then-GOP Gov. Bill Graves and legislators from recriminations that they’d been too aggressive in cutting taxes during the 1990s.

Similarly, the suddenness and depth of the 2008 financial meltdown all but wiped away questions about whether Democratic Gov. Kathleen Sebelius and lawmakers had risked the state’s long-term financial health by committing to big increases in education spending without raising taxes in 2005 and 2006.

But if legislative researchers are on target in their hotly debated projections, Kansas is already headed toward a long-running budget crisis.

“They’re going to have to work hard to explain the actions they took deliberately,” Wagnon said. “Sherriene can spin it as forces beyond their control, but the truth is this is what they created.”

Comments

Carol Bowen 1 year, 6 months ago

I'd say governor Brownback's strategy is truly transparent.

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tange 1 year, 6 months ago

Let's just take this to its logical conclusion and make Kansas a true rectangle.

/ draw the new boundary between Lawrence and Topeka

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Eride 1 year, 6 months ago

The tax change was JUST passed and Brownback is ALREADY blaming others for his plan's failure to achieve the goals he claimed the plan would bring about.

I must be dreaming, what a wonderfully entertaining satire.

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jafs 1 year, 6 months ago

Brownback was in fact not elected by the vast majority of Kansans.

He wasn't even elected by the vast majority of eligible voters in KS.

He was elected by about 1/3 of eligible voters in KS.

Those figures are accurate - there was approximately a 50% turnout of eligible voters, and Brownback got about 2/3 of the vote.

2/3 of 1/2 = 1/3

QED

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atiopatioo 1 year, 6 months ago

Government is a luxury that working people can no longer afford. Your roads are too luxurious. Your wages are too high. Your benefits are too high. The working people cannot afford to pay for governments exquisite demands.

The world eliminating the petrodollar will force Americans the austerity it deserves from years of stealing from the poor around the world.

It will be grand to observe.

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oldbaldguy 1 year, 6 months ago

Sage do you have any first hand experience with communist governments? Do you really believe we will ever head that way? Or is this all blow and go for fellow bloggers?

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question4u 1 year, 6 months ago

“This plan simplifies their taxes and helps business owners retain more of their profits, which can then be reinvested in their livelihood or the community,”

Potential profits drive expansion, not excess capital. Every successful business owner in Kansas knows that. If there is a potential to increase profits by hiring extra employees, then employers will do so, even if they have to borrow. It's laughable that some people actually buy the argument that a decrease in taxes will cause employers to start hiring. No one is going to add employees unless there are strong indicators of increased potential profits, just as no one is going to let employees go if there are such indicators.

Why hasn't Brownback demanded accountability from businesses that will pay no state income tax? If those businesses are going to reinvest "in their livelihood or the community” then it should be simple enough to document that. Why not give businesses tax breaks proportional to the new hires they make or the additional investment that they make in "their communities"? If Brownback is so confident that his "experiment" will work, why not hold businesses accountable for the tax breaks that they will receive?

The answer is as obvious as the reason that Brownback is working on his spin and Sherriene has the blather machine running.

“There are forces beyond the state’s control,” Brownback spokeswoman Sherriene Jones-Sontag said last week. “There’s still a great deal of uncertainty with the economy.”

If so, then doesn't Kansas need true leadership, not preparation of excuses for "experiments" that fail. Doesn't Brownback have the guts to hold himself accountable? He is no doubt correct that many in Kansas will guzzle any swill that Sherriene pours down their throats. They evidence is clear enough among the posts above. Kansans who don't want a leader who will stand behind his decisions and not start pointing fingers at everyone but himself won't even be able to blame Brownback for what happens if the projected multi-billion-dollar deficit hits the state.

Kansas: The land of experiments and premeditated excuses.

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autie 1 year, 6 months ago

I don't think we worry quite so much about the liberal pie as we do the loss of good old fashion common sense possessed by the moderate Republicans that previously ran this state. These trends do have a way of backlashing in the end.

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Patricia Davis 1 year, 6 months ago

Which is why sane Kansans every where must vote Democrat for state senators in November. Gridlock is the best we can hope for until we can kick Brownback and his stooges to the curb.

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verity 1 year, 6 months ago

Brownback knows exactly what he is doing. Slash and burn. Destroy the middle class, destroy moral, until we will all bow to him and the Kochs and give them what is their due---our complete obeisance.

Back to the dark/middle ages, folks. We will be ruled by our betters and depend on them for every crumb we get and we will be grateful for it.

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headdoctor 1 year, 6 months ago

At the very best this plan will be a wash. Cutting taxes on businesses does not mean more growth and jobs. Businesses only put more people to work if they are expanding because of new ventures or major sales and or service increases. The economic downturn has only proven that businesses can get by with forcing a smaller workforce to handle the load. The business tax relief will be used for everything but jobs and expansion.

The sales tax relief does not mean consumers are going to start buying more especially if Brownback successfully transfers some of the State Budget to local property taxes increases. Brownback hasn't figured out that in order for an economy to be viable. Money has to be moving in the basic day to day economy. If the consumers can't afford to buy more products and services along with the more wealthy setting on their money in investments, the money movement stagnates.

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autie 1 year, 6 months ago

“This plan simplifies their taxes and helps business owners retain more of their profits, which can then be reinvested in their livelihood or the community,”

The key word there being "can". Given that most of the businesses benefitting from the cuts are small and only have a few employees the opportunity to create new jobs is very limited. They do understand that in order for new jobs to be created, that will only happen when the market desires more and/or new products? Right? This is why these types of policies are based more in wishful thinking than any sound economic principle. I can see the boat industry benefitting. With all those extra un taxed profits going to new toys.

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jafs 1 year, 6 months ago

Either the tax cuts will stimulate the economy, more than making up for the amounts cut, or they won't.

If growth will lag, and we'll have some "belt-tightening", then the cuts won't work as advertised, right?

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Les Blevins 1 year, 6 months ago

I think we may as well stay the course that Brownback and the Republicans and the fossil fuel folks have us on today if we are all just fine with a future where jellyfish dominate the oceans and cockroaches and the lizards that feed on them dominate the rest of the earth.

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headdoctor 1 year, 6 months ago

For Starters Brownback could try a little truth and that truth is we do not have a surplus. That surplus is a fictitious figure from budgeting guess work. There is no surplus when Kansas has a $28.5 billion debt.

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Les Blevins 1 year, 6 months ago

Climate change will also cause more extreme weather patterns, including intense rain and flooding, but because of higher temperatures, soil moisture will decrease, and that means more intense drought. “What hurts Kansas also hurts the nation,” the report said. “Climate change will increase stress on America’s breadbasket, risking our food security.” An earlier study by the National Council of State Legislatures estimated that climate change could cost Kansas $1 billion per year. The report recommends that Kansas embrace renewable energy, focusing on wind, biomass and solar. Not only will this help the environment but it will also play into Kansas’ economic hand, the report said. “When people talk about climate change, too often they ignore the costs of not dealing with it. They also ignore the economic opportunities for Kansas in shifting to a clean energy economy,” said Nancy Jackson, executive director of the Climate and Energy Project.

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Les Blevins 1 year, 6 months ago

The problems facing residents of Kansas, the United States and even the entire world is that both KU and the Brownback administration in Topeka steadfastly support trickle-down economics that keeps us all tied to fossil fuels and intensive industrial farming even as the word keeps heating up and crops begin failing on a regular basis.

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SageonPage 1 year, 6 months ago

Mr. Hanna is filling in nicely for Scotty's daily attack on Brownback. Nice choice of words Mr. Hanna, nothing slanted about your viewpoint in this 'story', you have 'fashioned' quite the attack. You have incorporated 'massive' quotations from the democrats negative viewpoint to allowing hard working Kansans keep more of what they earn.

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Les Blevins 1 year, 6 months ago

Kansas faces dangers from rising CO2 Say KU Scientists We can expect more heat, more intense storms and more drought, say KU scientists in climate change report

By Scott Rothschild November 11, 2008

Higher temperatures, more intense storms and increased drought will plague Kansas this century because of rising carbon dioxide emissions, according to a study by Kansas University scientists that was released Tuesday.

The study details numerous dangers posed by climate change and should serve as a warning and prompt new policies that reduce CO2 emissions, the scientists said. “What’s important to remember — these are projections,” said Johannes Feddema, a geography professor who is a member of the Intergovernmental Panel on Climate Change. The study by Feddema and KU’s Nathaniel Brunsell, also a geography professor, was done for the Salina-based Land Institute’s Climate and Energy Project. By 2100, if greenhouse gas emissions continue to increase as projected, temperatures in Kansas will rise an average of 2 degrees to 4 degrees, the study said. Southwest Kansas could see an increase of 8 degrees. By 2060, winter temperatures will stay mostly above freezing. That means more insects, diseases, and the need for farmers to increase the use of costly pesticides, the scientists concluded. Higher summertime temperatures will also hurt crops and livestock and increase the need for irrigation.

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Les Blevins 1 year, 6 months ago

The cause I'm concerned with is the scientific ramifications of what we are doing to the environment.

Union Of Concerned Scientists

The Earth is warming and human activity is the primary cause. Climate disruptions put our food and water supply at risk, endanger our health, jeopardize our national security, and threaten other basic human needs. Some impacts—such as record high temperatures, melting glaciers, and severe flooding and droughts—are already becoming increasingly common across the country and around the world. So far, our national leaders are failing to act quickly to reduce heat-trapping emissions.

However, there is much we can do to protect the health and economic well-being of current and future generations from the consequences of the heat-trapping emissions caused when we burn coal, oil, and gas to generate electricity, drive our cars, and fuel our businesses.

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Slowponder 1 year, 6 months ago

This is so reminiscent of the opening scene "The Chicken Game" in Rebel Without a Cause.

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Les Blevins 1 year, 6 months ago

Incidently; I had my attorney write a letter to newly elected Kansas Governor Sam Brownback offering energy innovation manufacturing and deployment as a viable pathway for Kansas in addressing budget problems Kansas faced when he took office but he turned my proposal aside without so much as a response letter.

My attorney wrote;

Mr. Blevins would like to point out that most feedstock conversion systems focus on one or two feedstocks while the Advanced Alternative Energy conversion technology is designed to operate on a wide variety of feedstocks including;

• Crop Residues • Livestock and Poultry Wastes • Dedicated Energy Crops of Many Types • MSW, Urban Wastes and Special Wastes • Forest and Lumber Industry Residues • Food Processing Residues • Wood Products Manufacturing Wastes • Algae and Seaweed • Natural Gas and Landfill Gas • Low Rank Coal

The AAEC technology can use multiple advanced processes in the conversion of the above listed feedstocks to several higher value end products. Mr. Blevins believes his proposal will prove to be both a near term economic boost and a long term solution to the problems that face Kansans and the nation, including increasing energy efficiency and energy independence, combating global warming and climate change, and implementing smart-grid improvements. Mr. Blevins believes that therein lies the opportunity for bringing about the changes you are promising for Kansas.

Increasingly, "Trickle Up" technology is being seen as a viable way to repower the nation and the world via distributed clean energy solutions. This provides a backup for regional installations of solar and wind energy and enables the use of various types of biomass and waste resources which can be dispatched – on an as needed basis - when solar and wind are found to be insufficient.

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Les Blevins 1 year, 6 months ago

The GOP instituted the end of a century Negro Slavery when President Lincoln signed the Emancipation Proclamation ending the era of slave labor in the US. Today the "Grand old Party" is instituting a new era by introducing economic class slavery where the rich among us hold the economically disadvantaged in bondage while they pass the burden of excess spending for things like bank bailouts and unfunded wars off on the poor class and enjoy the perks of vast wealth without pulling their fair share of the financial load they created via unregulated bank bailouts and the military industrial complex Republican Ike Eisenhower warned us about. Thankfully many people in the so called "swing states" are beginning to figure out who Mitt Romney wants to lighten the burden on and who he would enslave.

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Mike1949 1 year, 6 months ago

Are the republicans going to reinstate the taxes when the state of Kansas is about ready to declare bankruptcy? Or are they going to let the state of Kansas declare bankruptcy and blame it on someone else?

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