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Archive for Monday, January 21, 2013

Brownback budget has Democrats, moderate Republicans facing dilemma

January 21, 2013

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On the street

Facing a $700 million deficit, should the state cut income taxes next year?

No. I think taxes are where a lot of the money comes from. If we cut taxes, we’ll have more of a mess.

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Do you think the state of Kansas should cut income taxes this year?

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— Gov. Sam Brownback, a conservative Republican, may have Democrats and moderate Republicans between a rock and a hard place.

Here is the situation.

The income tax cuts Brownback signed into law last year are draining the state treasury. Kansas will collect $5.5 billion in the fiscal year that starts July 1, which is approximately $700 million less than current spending.

But Brownback has doubled down this year, calling for more tax cuts with the eventual phase-out of the state income tax.

In order to do this and balance the budget, Brownback has proposed three major actions: making permanent what was supposed to be a temporary sales tax increase, eliminating the home mortgage interest deduction and transferring $245 million from the state highway fund to public schools.

"This budget is being held together by duct tape and dental floss," said House Minority Leader Paul Davis, D-Lawrence.

"It's all premised on keeping this irresponsible income tax (cut) in place," said Senate Minority Leader Anthony Hensley, D-Topeka.

"If the governor is not able to get some of the things that he wants here, I think he faces some real problems with being able to balance the budget," Davis said.

But conservatives, who now make up majorities in the House and Senate, have been grumbling that they want to cut the budget.

If moderate Republicans and Democrats don't try to do the heavy lifting for Brownback, they may see school funding and other areas of government that they support get whacked.

"I'm concerned about a lot of things that Democrats care about, but understand that there is one reason that we're in this situation and that is this massive tax plan that the state simply can't afford that has put us in a terrible fiscal situation," Davis said.

The tax cuts Brownback approved last year reduced state income tax rates and eliminated income taxes for 191,000 business owners.

In 2010, before Brownback was governor, the Legislature approved a one-cent increase in the state sales tax to avoid further cuts to services during the Great Recession.

Six-tenths of a cent of the increase is scheduled to go away July 1, but Brownback wants to keep it in place in order to lower the highest income tax bracket from 4.9 percent to 3.5 percent and drop the lowest rate from 3 percent to 1.9 percent.

Hensley said if Brownback's budget-balancing proposals don't pass, "we'll have to see what the consequences are. I'm not willing to talk about hypotheticals."

But, he said, he will not vote to extend the sales tax, noting that when the increase was approved, legislators promised that it would fall back in 2013. "I'm not going back on my word," Hensley said.

Comments

1 year, 2 months ago

This forum needs a shun button.

3

rockchalk1977 1 year, 2 months ago

This story reminds me it's been 1,364 days since Senate Democrats last brought a budget up for a vote. Harry Reid is a disgrace to this country.

1

hammerhawk 1 year, 2 months ago

I am a retired school administrator who has found it difficult to support anything proposed by current Governor Brownback. But low and behold!!!! Brownback says he wants Kansas to be more like Texas. Me too. Let's cut taxes on food!! Texas is one of the states that does not charge sales tax on FOOD! What a great idea. Even a person who knows we need taxes to support quality schools could support eliminating sales taxes for FOOD.

Join me and get the word out. Cut sales taxes on FOOD.

0

1 year, 2 months ago

Let see. Cutting income taxes, but removing the home mortgage interest deduction, and leaving in place the increased sales tax. The last two are regressive taxes as they both make up a larger portion of what taxes people pay; plain and simple. To top it off, Kansas is one of 12 states still taxing food purchased in a grocery at the normal sales tax rate. This again, is regressive. Need I explain why?

After all these cuts, the only way to increase income for schools, fire & police, and so on is to increase property taxes and personal property tax (car tags, boat tags ...). This again is regressive and the less well off pay a larger percentage of their meager income to support these taxes. In essence, what The Guv has done is to shift the tax burden from the state level to the local level thus making the local governments the "bad guy" for raising taxes and the state the "good guy" for lowering them. The sad thing is that most will see only that and not look at the man behind the curtain.

@chootspa. I agree, it is indeed very strange that Trabert is calling for an end to crony capitalism. Wonder what his angle is.

@Trabert. I've learned to take most, if not all of what you say with a grain of salt. This goes for what you say here and what I've heard from you in public forums. You write as if you support The Guv's tax incentives (read that as ALEC / Koch) which is not surprising as the KPI is arguably a Koch mouthpiece. I ask you to remember this, regardless of what you, the "conservatives" in the state legislature or The Guv say, a pig is still a pig.

3

verity 1 year, 2 months ago

For once I actually understood what Mr Trabert said, but it still made no sense.

I join with the others in asking for particulars on how we are going to cut spending that much and still offer needed services.

And how many times must it be said---Gov Brownback is NOT a conservative.

And how many times must it be said that the real agenda is not efficient anything, but the destruction of the middle class and a return to the dark ages when church and state were intertwined and life was short and brutal for most people. And we're getting there fast.

2

jonas_opines 1 year, 2 months ago

"Explain "crony capitalism" for us please."

Ha, what do you think it means?

"Somebody other than me got the money."

0

jjt 1 year, 2 months ago

Losing 1500 +/- of TAX relief on home mortgage interest is not the big deal. NOT being able to sell your home is the big deal, having it repossessed is the big deal, being underwater is the big deal. "Oh, that wont happen" Well it has already ......... Mrs Thatcher did exactly this in '88 in the UK. At the time I was a partner in a Real Estate agency with around 80 staff and 12 offices. Like most folk today we did not pay much attention to the relief being taken away.
WE WERE WRONG. In the space of 6 weeks around October sales dropped by around 70% as confidence in the market crashed. It never really recovered. What I am writing is not an opinion it is what actually happened. If one thinks the previous last two years property market has been bad you have not seen anything yet. If the same thing happens here and confidence in the property market collapses as it did in the UK so do sales in everything else from car sales to restaurants.

2

RubyVrooom 1 year, 2 months ago

Does anyone have an idea of who will be running against Brownback next year? Or is it just assumed that he's going to win re-election?

1

autie 1 year, 2 months ago

So Dave says that government should not be involved in economic development? From what I see in my part of the state, without property tax abatements we would have NO industry or jobs. How is that good? And by that way of thinking, I guess it would be just fine with the Wichita brothers for the machinery/equipment exemptions to be done away with and go back to the old way of classifing real property for tax purposes. Trabert talks out of both sides of his mouth. His role is to misdirect and confuse, I think. ALEC and AFP are two of the biggest problems we face in this state today..oh wait, make that three; cain't leave out the Kansas Chamber of Commerce.

3

Dave Trabert 1 year, 2 months ago

Putting an end to crony capitalism is another way to implement tax reform. There are many ways to reduce the tax burden without compromising services. I understand its hard to imagine how that can be done...but it can. The key is getting government agencies focused on a Better Service, Better Price mentality instead of preserving the status quo.

I would be happy to come to Lawrence and participate in a public discussion of the many ways this can be accomplished.

Maybe LJW or some other group would like to help arrange it.

1

Richard Heckler 1 year, 2 months ago

"Government should also stop giving away taxpayer money in the name of economic development." so says Dave Trabert Hmmmmmmmmm

How about that $9 million to Marrs Candy?

"Worker's taxes siphoned off by their bosses (AND Sam Brownback) Thursday, April 26, 2012 | Posted by Jim Hightower

Where is the $47 million tax dollars that belong to Kansas taxpayers?

My congratulations to workers in 16 states – from Maine to Georgia, New Jersey to Colorado! Many of you will be thrilled to know that the income taxes deducted from your paychecks each month are going to a very worthy cause: your corporate boss.

Good Jobs First, a non-profit, non-partisan research center, has analyzed state programs meant to create jobs, but instead have created some $700 million a year in corporate welfare. This scam starts with the normal practice of corporations withholding from each employee's monthly check the state income taxes their workers owe.

But rather than remitting this money to pay for state services, these 16 states simply allow the corporations to keep the tax payments for themselves! Adding to the funkiness of taxation-by-corporation, the bosses don't even have to tell workers that the company is siphoning off their state taxes for its own fun and profit.

These heists are rationalized in the name of "job creation," but that's a hoax, too. They're really just bribes the states pay to get corporations to move existing jobs from one state to another, or they're hostage payments to corporations that demand the public's money – or else they'll move their jobs out of state.

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! Among the 2,700 corporations cashing in on such absurd diversions of state taxes from public need to private greed are Goldman Sachs, GE, Motorola, and (((AMC Entertainment has since been sold to Dalian Wanda Group of China. )))

When this tax deal was cut AMC and Cordish Co. of Baltimore were partners. As of 5/25/12 this partnership is becoming history.

As with many buyouts/mergers people lose jobs sooner of later due to the expense of purchase. Is all of the above legal as far as the $47 million tax dollar give away is concerned?

Where is the $47 million tax dollars?

4

Richard Heckler 1 year, 2 months ago

"Gov. Sam Brownback, a conservative Republican"

Maybe not even a republican. Definitely conservative BUT neither fiscal conservative nor fiscally responsible.

Now if he drains the treasury he can put Kansas up for sale to the like of Koch,the Waltons and perhaps Karl Rove. Then our taxes would definitely need to increase to cover the cost of a rather reckless spending high profit group. And all in Kansas would be forced to think like Kochs,Waltons and the Rove team.

5

question4u 1 year, 2 months ago

Nothing is easier than talking about "efficiency" and "better service." Those words are like "more enjoyable." For whom? To what degree? How will it be measured? What is given up in exchange for efficiency? What are the objective criteria that will yield quantifiable results on which everyone will agree?

It may be a lot more efficient to cut across a lawn instead of walking on a sidewalk, and the end result is the same: you get where you're going. But in one case the grass is healthy and in the other it's dead. If you couldn't care less about grass then the easiest route is the best. If you're capable of looking at the larger picture, then the answer isn't so simple. Now replace the grass with people. It takes a particularly callous kind of person to talk about efficiency while ignoring that factor.

Everyone would like to have something for nothing, but claims that efficiency will get you that are just blather unless they are supported by hard facts that take into account every angle and every element that will be affected. Until you define slippery terms like "efficiency" and "better service" in concrete and universally recognized terms you're just selling snake oil. There's too much of that on the market in Kansas already.

3

Bob Forer 1 year, 2 months ago

When built in 1981, the Holidome was touted as a state-of-the art facility. Its glory years were not long, which lead to its changing hands several times before the current owners invested millions of dollars four short years ago. If I recall, the influx of capital did not include any city giveaways.

For those folks who talk about Lawrence being unfriendly to business, it would be a travesty and patently unfair to subsidize a second convention center that would compete with the Holidome.

Let Compton and his cronies play by the same rules as outside developers.

5

JohnSickels 1 year, 2 months ago

I really hope Dave Trabert never has a disabled person in his family or becomes disabled himself in Brownback's Kansas. Nursing home care will burn through his Koch-fueled bank account pretty quickly.

10

markoo 1 year, 2 months ago

"If moderate Republicans and Democrats don't try to do the heavy lifting for Brownback, they may see school funding and other areas of government that they support get whacked."

Funny, didn't we just see a court ruling specifically stating that the State is required to INCREASE school funding? Granted, I know it's going to the State Supreme Court, which I'm sure McAllister and crew will likely lose, once again, and thus be forced to comply with the law. But they'll either have to change the law altogether (which last week it seemed the GOP Wingnuts in Congress were backing off, probably because their constituents said no flippin' way), or they'll have to comply.

Enough with the bologna, Sammy.

2

Bob Forer 1 year, 2 months ago

The only people who will benefit from making the sales tax increase permanent and lowering the top income bracket will be the wealthy,. as most of the money they save in income tax will probably not be spent on items subject to sales tax. The working poor and working class will be hurt, as much of their disposable income is spent on essential living items such as food as clothing.

So folks making $200,000.00 plus per year will save $3,000.00 plus per year in income taxes. Not that they really need that extra money, but it will be on the backs of folks who labor and toil for a living. So much for Christian philosophy.

Brownback and his CINO (Christian in name only) cronies, when you come right down to it, are greedy, despicable people. i

14

Dave Trabert 1 year, 2 months ago

Implementing tax reform does not require the trade-off of service cuts. That may how government has responded in the past but it's just a bad choice. Instead, government should be made to operate much more efficiently...providing the same or better service at a better price. Government should also stop giving away taxpayer money in the name of economic development.

State spending needs to be reduced by $186 per-resident to implement the reforms passed last year, which would still make Kansas the high-spender in the region. State government just needs to operate about 8.5% more efficiently and there will be healthy ending balances and balanced budgets.

The NY Times recently reported that Kansas is the 11th most generous state in the nation in terms of giving away taxpayer money, at $355 per-resident.

Completely eliminating income tax would be very good for Kansas but until government operates as efficiently as possible and stops giving away taxpayer money in the form of crony capitalism, every tax rate will be too high. No sales tax increase now or elimination of the mortgage deduction. Better service, better price.

3

Centerville 1 year, 2 months ago

Income taxes don't 'drain the treasury'. The money has never belonged to the state in the first place. Moderate Republicans need some serious soul searching and question their slack-jawed love of taxes.

4

JohnSickels 1 year, 2 months ago

Can't really say that I see the dilemma for Dems and moderate Repubs. The conservatives control everything.

Frankly at this point I think the citizens of Douglas County and Lawrence need to be figuring out how to preserve our services and quality of life as much as possible. The rest of the state voted to destroy itself and they deserve what they get.

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