Advertisement

Archive for Tuesday, June 4, 2013

Editorial: Tax impacts

The governor claims “the nation is watching” the tax strategy being pursued in Kansas. Are other states applauding or laughing?

June 4, 2013

Advertisement

The 2013 session of the Kansas Legislature ended with a whimper early Sunday morning by narrowly passing tax and budget bills that will have a profound impact on the state.

The nature of that impact, however, is the topic of considerable controversy among legislators and the governor, who can’t even agree on whether they raised taxes or lowered them.

Certain impacts, however, are clear, including the hit taken by higher education in the state. The state’s higher education system will see a funding cut of $66 million over the next two years. That includes reductions of $6 million for Kansas University, $8 million for the KU Medical Center and $6 million at Kansas State University.

The tax plan approved early Sunday cancels the drop to a 5.7 percent sales tax and replaces it with a 6.15 percent tax. Although earlier negotiations included a lower sales tax rate on groceries, no such measure was included in the final bill. Income tax rates were lowered somewhat, but those reductions will be offset by lower standard deductions for taxpayers and reductions in key deductions, including one for mortgage interest. The higher sales tax and lower standard deductions both fall disproportionately on lower-income Kansans.

According to legislative researchers, the approved tax plan will generate a net gain of $777 million over the next five years, but that falls far short of making up for the $4.6 billion in lost revenue over the same period resulting from last year’s income tax cuts. Gov. Sam Brownback continues to assert that this year’s measure can’t be construed as anything but a tax reduction for Kansans. He lauded the bills as a “fabulous package” that he said will make Kansas “not only the best in the country to raise a family but also the best to grow a business.”

A number of Kansans would beg to differ. High-quality K-12 education is important not only to families but to businesses seeking to locate in Kansas. Next year’s budget provides flat state funding for those schools with no provision for additional funding if the Kansas Supreme Court rules that the state isn’t meeting its constitutional obligation.

Businesses — especially the high-tech businesses Kansas hopes to attract — also need skilled workers. The huge funding cuts to higher education will make it harder to fill those needs. Cuts to the KU Medical Center will hamper efforts to get the new National Cancer Center off the ground, and cuts at Kansas State may impact its ability to support the new National Bio and Agro-Defense Facility. Wichita’s National Center for Aviation Training, which received $5 million in funding this year, will receive just $3 million next year.

How do these cuts support and promote business development in Kansas?

Brownback and some Republican legislative leaders proudly proclaim that “the nation is watching” what we’re doing here in Kansas.

So are Kansans, and many of them are worried about what they see.

Comments

Lawrence Morgan 1 year, 2 months ago

Thank you for this excellent editorial. I'm VERY worried about Kansas and its future.

9

thinkb4utype 1 year, 2 months ago

do you realize what this sentence means: According to legislative researchers, the approved tax plan will generate a net gain of $777 million over the next five years, but that falls far short of making up for the $4.6 billion in lost revenue over the same period resulting from last year’s income tax cuts.

$4.6 BILLION in lost revenue (i.e. tax cuts) minus $777 increased taxes = nearly $4 BILLION TAX CUT...

Why are the LJWorld Editorial Board and especially Scott Rothschild afraid to call Brownback's tax policy what it is? A tax cut.

I for one appreciate being "allowed" by state government to keep more of my own money that i earned and spending it on what i want...at local stores and restaurants who in turn will see increased revenues which they will either reinvest in their businesses or spend themselves... that increased spending will generate more sales taxes at the local and state levels...

it will be interesting to see just how much of an impact a $4 Billion tax cut will have on the economy...

0

jafs 1 year, 2 months ago

Last year's income tax cut is in fact a cut, but this year's plan is an increase.

The increase will fall disproportionately on lower and middle income folks, while those at the top will benefit from the cut.

What spending would you cut to balance the budget, given a $4 billion shortfall?

According to something I read the other day, those making less than $37K will see their taxes increase, and those above will see them decrease. I imagine that a lot more people in KS fall below that amount than above it.

9

optimist 1 year, 2 months ago

There is no increase on lower income earners. There is a reduction in their draw from the tax revenues but for the vast majority they will continue to be a net draw on tax revenue. Redistribution lives on.

0

jafs 1 year, 2 months ago

Source?

What on earth are you talking about? Folks who make $30K aren't a "draw on tax revenue" or any such thing.

3

Liberty275 1 year, 2 months ago

Redistribution is the new American way.

0

Jefferson_County 1 year, 2 months ago

reply to "thinkb4youtype" What is missing from your analysis is the that the $4 billion is a shortfall in the state budget. The cuts this year are a drop in the bucket on closing that. What are you willing to do without - and don't raise the vague canard of "bloated government, etc." How about severely reduced road maintenance? Government offices open fewer hours (not only inconvenient for you, but less money for them to spend counter to your own argument)? The list goes on. I hardly think of the LJW as being a liberal mouthpiece.

5

Liberty275 1 year, 2 months ago

"What are you willing to do without"

70% of government.

0

Kate Rogge 1 year, 2 months ago

It's hardly ignorance. It's the Kochs' well-planned and carefully scheduled destruction of our quality of life here in Kansas in the service of exalting the powerful by ruthlessly harming the struggling poor and disabled. After all, where's the fun of being filthy rich if you can't own an entire state?

7

streetman 1 year, 2 months ago

Please supply a source(s) backing-up this assertion.

0

Michael LoBurgio 1 year, 2 months ago

Congrats to Charles and David Koch, who made out like bandits during the 2013 KS legislative session. Just a few of their many accomplishments: 1) passing a $777 million tax increase on lower and middle income Kansans to get their own income taxes reduced, 2) slashing unemployment benefits, 3) subjecting TANF and unemployment benefit recipients to drug testing, and 4) stifling the political voices of Kansas teachers by disallowing automatic payroll deductions to their KNEA PAC.

Given the Koch's stranglehold on the KS Legislature, just thought I'd pass along an updated version on how a bill REALLY becomes law in Kansas. Enjoy!

11

Phoghorn 1 year, 2 months ago

Oh noes, not a drug test! Oh the horror! Hey, my former employer made me get tested. I survived.

As far as #4 is concerned, if I was a teacher, I would be thrilled that I could keep the money that would otherwise be deducted out of my paycheck. Perhaps I would not like having money automatically diverted from my paycheck into a PAC.

Edited some terminology in the first paragraph related to drug testing.

0

jafs 1 year, 2 months ago

Any employee who wanted to opt out of that deduction already had that ability.

3

optimist 1 year, 2 months ago

No problem then. Now they simply have to opt in every pay period by simply writing a check.

0

jafs 1 year, 2 months ago

Fine with me.

The more objectionable parts of these bills were the attempt to stop them from using their own money to engage in political activity, regardless of how the money got to the groups.

1

Phoghorn 1 year, 2 months ago

Fair enough, but I am glad to see that the practice is disallowed. Yes, I know it is a "big government law", but in this case the law increases, not decreases freedom.

0

jafs 1 year, 2 months ago

What??

It doesn't increase freedom - they already had the freedom you're talking about. This law prevents them from having the deduction automatically made, which decreases their freedom in fact.

4

Phoghorn 1 year, 2 months ago

Let me clarify my previous comment. The law appears to be an attempt to prevent unions from getting a mandatory deduction approved in the future. Of course, that would only apply if Kansas quit being a right to work state, which I do not see happening anytime in the near future.

0

jafs 1 year, 2 months ago

There are two parts to union dues, one part goes towards normal union activities, and the other towards political activity.

Even in states that aren't right to work, I believe that union members can opt out of paying dues that go towards political activity, if they want to.

So, it's really a non issue, if the concern is that union members be allowed to not pay into the political activity of the union.

2

optimist 1 year, 2 months ago

Next step is to stop automatic deduction of taxes so that each of us has to write the check. I bet that will change a lot of minds about the true cost of their government and peak their interest in how the money is spent and often time wasted.

2

kernal 1 year, 2 months ago

Dolph is not the editor and his editorials are on Saturdays.

1

fiddleback 1 year, 2 months ago

Regardless of who wrote it, it's galling to read this tepid hand-wringing on the editorial page when Dolph just as often uses this venue to spout the same trickle-down anti-public sector bromides that have been so horrifically carried out to their logical conclusions. The only question now is whether "small government" simpletons like Dolph and most of Kansas will admit to what they have wrought and bring themselves to abandon these far-right thugs.

7

wastewatcher 1 year, 2 months ago

Human Capital is very portable. People go to the jobs. We do not have to grow and train our own talent. For years we have complained about the out migration of Kansas trained workers, maybe now we can turn that around and import talent as well as keep our Kansas trained talent home. It is worth a shot and it can and will work.

0

remember_username 1 year, 2 months ago

Only if Kansas can convince educated workers to relocate to Kansas. Kansas has less to offer today than it did decades ago and the state cannot compete with most of the rest of the country for the best talent. I believe Kansas is interested only in retaining low wage workers by convincing this labor pool that "there is no place like home". Why invest in the best and the brightest and the infrastructure that supports them when they tend to leave for states with more to offer anyway.

4

LJD230 1 year, 2 months ago

Laughing!!!! But that is not an unusual response to anything relating to Kansas politics or the right wing ethos that dominates Kansas. Kansans elect and therefore deserve what they get from their leaders. So the choices are simple: vote them out of office or keep them.

1

question4u 1 year, 2 months ago

No doubt there are people around the country who now find Kansas more appealing, but will they really leave Yazoo, Mississippi; Eunice, Louisiana; and Chunchula, Alabama to come here? More importantly what does Kansas gain if they do come?

The idea that educated people will be drawn to a state that doesn't value education is, to say the least, optimistic. The idea that educated people will be drawn to a state that doesn't value education and has positioned itself for a massive deficit goes well beyond optimistic. The idea that educated people will be drawn to a state that doesn't value education, has positioned itself for a massive deficit, and has just used its legislative session to work on turning the clock back to the 19th century is just plain ludicrous.

Who could possibly think that lawsuits over adequate funding for K-12 education and cuts to higher education would make Kansas attractive to any educated person, especially one with kids? That's like thinking that if you spit on your comb and slick down your hair people will treat you like Brad Pitt

1

parrothead8 1 year, 2 months ago

The nation is watching Kansas? Yeah, right. The only time the nation watches Kansas is during March Madness.

2

vuduchyld 1 year, 2 months ago

Kansas is a laughingstock now all throughout the land Make slashing cuts, hope for the best--that's the Brownback/Koch tax plan The corporate interests and the rich get their own special rules But why would a business move here when we won't fund public schools?

Welcome to Brownbackistan

0

jayhawklawrence 1 year, 2 months ago

Kansas is interesting because we are going to be able to see up close how right wing government works.

You cannot hide it behind a smoke screen of anti-Obamisms. Even the hardest hearted voter will not be able to blame Obama for the negative results of the Brownback administration.

Bob Dole reminded me that there are intelligent people left on the planet and there is hope of fixing what is wrong in our political system. In order to do that, we have to prove the political strategists wrong because what they are saying is that winning elections is all about having the most money to spend. They are saying in private that Americans can be taught to beg, roll over and fetch a stick just like a trained poodle.

When we look at their numbers, it would appear to be so.

I would like to think that in the next election, the American people might want to prove them wrong.

1

verity 1 year, 2 months ago

One has only to read/listen to news sources from outside the state to know, that, yes, others do notice Kansas, particularly when we look foolish. And the Kochs are widely known outside the state. Their attempt to buy the Tribune Company, which owns The Los Angeles Times, has caused quite a backlash.

I haven't done research on where I would move because I'm too invested here and would lose too much by leaving. That's why I will stay and fight.

0

Commenting has been disabled for this item.