Archive for Monday, February 18, 2013

Legislators face dilemma: tax increases or budget cuts

February 18, 2013


— Legislators are in a pickle.

Because of income tax cuts they approved last year, the state treasury is projected to lose hundreds of millions of dollars in a relatively short period of time.

So this year, Gov. Sam Brownback is proposing “pay fors” to balance the state budget.

But these “pay fors” are proving unpopular among Brownback’s Republican colleagues because they are tax increases.

They include extension of a 1-cent state sales tax increase, most of which was supposed to sunset on July 1, and elimination of major tax deductions for homeowners.

House Speaker Ray Merrick, R-Stilwell, said Republicans, who own a 92-33 advantage over Democrats in the House, haven’t warmed up to Brownback’s idea to keep the state sales tax rate at 6.3 percent, when it is supposed to ratchet down to 5.7 percent.

“I don’t see a lot of appetite out here to retain the sales tax,” he said.

And legislators are getting heat from realtors and homeowners who don’t want to lose the mortgage interest and property tax deductions. In the Senate, also controlled by Republicans 32-8, a committee put the property tax deduction back in its recommended bill.

Without support for those “pay fors,” Republicans now are looking at budget cuts.

Merrick said he gave his House Appropriations Chairman Marc Rhoades, R-Newton, a pair of golden scissors to start snipping away at state spending. But asked where the budget could be cut, Merrick declined to provide any specifics.

That budget process accelerates this week as the Appropriations and Senate Ways and Means Committee start analyzing big-ticket agencies. On Monday, Ways and Means will consider Kansas University’s budget. A subcommittee already has endorsed a $10 million cut from the governor’s recommendation at the KU Medical Center. That $10 million was earmarked to help start construction of a health education building that KU has said is a major priority.

Brownback said he understands the difficulties that legislators face on tax issues.

“Addressing tax policy is hard,” he said. “Going from a slow growth to pro-growth state involves tax policy that is difficult. You’re moving really from taxing the production side of the equation to the consumption side of the equation, and that is difficult,” he said.

Brownback’s plan, which he started last year, is to cut the state income tax with the goal being the eventual elimination of the income tax.

He argues that will lure more businesses to Kansas and stimulate economic growth. But critics say it is already cratering the budget and threatening education and social services.

House Democratic Leader Paul Davis of Lawrence said most Republicans are divided between those who want to follow Brownback’s lead and those who want to make significant budget cuts.

“When you put conservative Republicans in charge of the store, you’re seeing that they are going to pass massive income taxes (cuts) that largely benefit the rich, that the state cannot afford,” Davis said.

Last year, Republicans, at Brownback’s direction, eliminated tax credits helping low-income Kansans, while also eliminating income taxes for the owners of 191,000 businesses.

Davis added, “And the question is now, are we going to cut things that I think people want to see state government fund — schools, transportation, social services — or are they going to raise taxes on the middle class and the people at the lower end of the scale to pay for it?”


oldexbeat 5 years, 3 months ago

so we go -- in brownback speak -- from taxing production -- ie, the more you produce, the tax goes up with it -- to taxing consumption -- the more you buy, the more tax you pay.

Gee -- those 5th graders can answer -- what will happen when you tax consumption ? Huh. It will go down, some thing production didn't do because profit was going up along with it.

So how do you protect consumption ? Big families, lots of 'needs' created by marketing. Etc.

Equals -- less money to education, or to health services or to birthcontrol. More people, faster use of water, higher taxes on purchases. What a dumb idea.

Michael Henderson 5 years, 2 months ago

Gov. Brownback, newly converted to Roman Catholicism, must obey the teachings of his new church by declaring birth control contrary to the will of God. So naturally he has cut funding for it. In addition, cuts to education benefit Brownback's agenda by keeping more people in the dark about his plan to reward the rich by punishing the poor.

just_another_bozo_on_this_bus 5 years, 3 months ago

“Going from a slow growth to pro-growth state involves tax policy that is difficult. You’re moving really from taxing the production side of the equation to the consumption side of the equation, and that is difficult,”

Translation-- eventually, the results of class warfare become painfully obvious.

Michael Henderson 5 years, 2 months ago

But see my comment above about the governor's religion and the long-held papal view that birth control is a violation of God's will.

DScully 5 years, 3 months ago

He has already hurt so many by getting rid of deductions that helped those who needed it, such as child care deductions and homestead refund for renters. The man truly has no shame...just an SoB.

Michael LoBurgio 5 years, 3 months ago

Brownback's tax plan summarized:

  1. Extend the 6.3% statewide sales tax.
  2. Surrepticiously raise local property taxes.
  3. Give Kansas income tax breaks to "small" businesses like Koch industries while placing all of the income tax burden on the backs of W-2 wage earners.
  4. Eliminate the mortgage interest deduction.
  5. Eliminate the real estate tax deduction.
  6. Somehow use this plan to be viewed as a "tax reducer"to get re-elected in 2014 and move back to Washington DC before the plan implodes, bankrupting Kansas.

SnakeFist 5 years, 3 months ago

Look on the bright side: Conservatives have complete power and no one to blame when their economic experiment fails miserably. Of course, it will take us decades to clean up the mess they're going to leave behind.

William Weissbeck 5 years, 3 months ago

Maybe the GOP should just adopt George W's phrase to explain their confusion, "this is hard work." And Democrats should carry signs that read "Reality Bites, Doesn't It?"

chootspa 5 years, 3 months ago

Gee - who could have seen this coming?

Alceste 5 years, 3 months ago

No matter how broke (broken?) the state of Kansas may be, the politicians all agree on one thing at the very least and that is paying themselves. Let's take a look at the way the "Legislators" pay themselves following their dedicated service to the people of the state of Kansas (COUGH) and that includes Paul Davis who has not once had the courage to admit he too has his had in the till and shall be laughing all the way to bank when it comes time for Paul Davis to collect his retirement package from KPERS:

Even though they only really "earn" for a couple of months of the year, they get credit for earning it all year long.

For the legislator listing all income - the daily rate, subsistence and allowance - this is how annualization is calculated:

•$88.66 (daily rate) x 31 (days) x 12 (months) = $32,981.52

•$123 (subsistence) x 31 (days) x 12 (months) = $45,756

•$7,083 non-session allowance.

Altogether, that equals $85,820.52, and that's the pay figure that would be used for that legislator retiring now.

Now then, that political hack who is president of the Kansas hillbilly senate or whatever the operation is has defended this obscene payout because legilsators work for " little money....". Ok....if that is the case, why aren't all civil servants for the state of Kansas allowed to have their KPERS benefit calculated on a 372 day work year? Paul Davis has defended the payoff to as demonstrated by his lack of action to correct it. Same with Marci Francisco, Barbara Ballard, Tom Holland, et. all.

In calendar year 2010, employer contributions for legislators in KPERS slightly topped $900,000.

A legislator retiring with an annualized pay of $85,820.52, and with 10 years' service, would have an annual KPERS benefit of $15,018.60, for a monthly benefit of $1,251.55, according to KPERS. If the retiring legislator had 20 years' service, the annual benefit would be $30,037.20, and monthly, $2,503.10.

A state social services worker in a supervisory role retired in 1995 after 15 years and draws a monthly KPERS benefit of $524. That is equal to the monthly benefit for a county-level commercial appraiser who retired at 65, vested at nine years with KPERS.

(Now the "Legislators" will say they "fixed" that calculation.....but they simply changed it from a 372 day work year to a 365 day work year in last year's session. Big deal. What a crock of BS).

It's for the children, you know. shrug

Michael Henderson 5 years, 2 months ago

Brownback has in fact increased government spending and further deepened our deficit. See Lawrence Journal-World 2/18/13 Legislators face dilemma: tax increases or budget cuts.

speedy47 5 years, 3 months ago

Whoa! Found the budget problem. They don't need golden scissors for cutting the budget. Stainless steel's good enough for me it ought to be good enough for them. LOL

Pastor_Bedtime 5 years, 3 months ago

Will Brownie be refunding the huge sums of money he has mooched from the hard working, productive taxpayers over the years that he and his family have taken in the name of farm subsidies?

Liberty275 5 years, 3 months ago

Cut all state budgets by 30%. Give it a year and cut again as needed.

George_Braziller 5 years, 3 months ago

How about some specifics as to what you'd cut by 30% and why.

yourworstnightmare 5 years, 3 months ago

Kansas, more than other other state, is the master of the self-inflicted wound.

KSManimal 5 years, 3 months ago

The headline is all wrong. It should not read "Legislators face dilemma..."; but rather "Legislators manufacture dilemma...."

There would be no problem at all if - without cutting any programs and without raising taxes on anyone who currently PAYS taxes - the legislature would simply require EVERYONE to pay their fair share.

There is no logical reason to exempt some people from income taxes, or from property taxes, or from sales taxes. Everyone who lives here, works here, and/or does business here benefits from our state infrastructure, public schools, and public services. If everyone paid for those things, the bill to each of us would be much less and we'd get much more for it.

Armstrong 5 years, 3 months ago

Hasn't this "sky is falling " piece been sufficiently beaten to death yet ? I believe this is the thrid or fourth time around for this journailistic jewel.

Paul R Getto 5 years, 3 months ago

“Addressing tax policy is hard,” he said. “Going from a slow growth to pro-growth state involves tax policy that is difficult. You’re moving really from taxing the production side of the equation to the consumption side of the equation, and that is difficult,” he said.

More magical thinking. Few independent studies support those who "Laffer" their way through public policy.

Alceste 5 years, 3 months ago

Paul R. Getto:

What grows is the KPERS benefit to each and every Legislator due to the stupidty and complacency of the Kansas voters.

The people of Kansas deserve everything they get ....and more importantly..... do NOT get from the Kansas Legislature. After all, "they" are ALL "elected officials". Right? (Well, kinda....).

Find me a dumber voter than a Kansas there's aTV "reality show"..............

Richard Heckler 5 years, 2 months ago

Last year, Kansas used workers' withholding taxes to bribe AMC Entertainment with a $47 million payment to move its headquarters from downtown Kansas City, Missouri, to a KC suburb on the Kansas side, just 10 miles away. What a ripoff!

(((AMC Entertainment has since been sold to Dalian Wanda Group of China. )))

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