Archive for Tuesday, March 10, 2015

State budget shortfalls worry Kansas farm leaders

March 10, 2015, 5:09 p.m. Updated March 10, 2015, 10:34 p.m.

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— Kansas needs to rebalance its income, sales and property taxes in the wake of revenue shortfalls created by massive income tax cuts enacted last year, the president of the Kansas Farm Bureau said Tuesday.

Rich Felts, who took over as president of the state’s largest farm organization in December, said he worries that property taxes may take the brunt of hikes in the waning days of the legislative session as lawmakers struggle to close the budget hole. While a proposal that would have dramatically increased property taxes on Kansas agricultural land appears dead for now, farm leaders are warily eyeing whether property tax hikes will resurface as an amendment to a bill.

The GOP-dominated Legislature must close a projected budget deficit of nearly $600 million for the fiscal year beginning July 1. The shortfall arose after lawmakers aggressively cut income taxes in 2012 and 2013 at Republican Gov. Sam Brownback’s urging to stimulate the economy. One policy exempted 53,000 farmers from income taxes, along with the owners of 281,000 other businesses.

Brownback has proposed backing off future income tax cuts that have been promised and raising tobacco and alcohol taxes. Legislators are considering those ideas and a wide variety of other options.

For years, Kansas had “a three-legged stool” of income, sales and property taxes that worked until the income tax cuts, Felts said.

Felts stressed that his statements reflect only his personal opinion because his organization did not take a position on the income tax cuts when members met last December. Its members didn’t realize at the time the extent of the looming shortfall, he said.

The official Kansas Farm Bureau policy opposes any increase in property taxes, and the group in general is not in favor of raising taxes. Felts said he could see the organization saying at some point that the state needs to rebalance the tax structure.

“It is an issue we need to address,” he said.

Felts farms 3,000 acres of wheat, corn and soybeans and raises 4,000 hogs in Montgomery County in southeast Kansas. As a limited liability corporation, or LLC, he pays no state income taxes on his farming operations, nor does he pay sales taxes for the fertilizer, chemicals and seed he buys to put in a crop.

But he said anybody who thinks farmers do not pay their fair share of state taxes should see his annual property tax bill of $27,000.

Comments

Steve King 2 years, 8 months ago

Nice to see them fellers out west starting to howl. Like a pebble in a pond the wake (tax cut induced revenue deficits) starts affecting more and more people. But in perspective, he has 3,000 acres. That's $9.00 an acre. Beans at 30 bushel/acre at $10/bushel he's grossing $ 900,000. Cut it in half for the hogs? Don't know what they do in the market but say he's turning $600,000 a year his tax is only 4.5%. Small consequence. And no income tax? I'd pay it and not complain. He's making six figures a year, paying no income tax on it and now worried they will raise his property tax. Go figure.

Marc Wilborn 2 years, 8 months ago

I think that you meant no state income tax. He pays quite a bit of federal income tax. Our three legged stool showed its weakness during 2008 when sales taxes hit the skids. The constant roll back of real estate property taxes for political gain also contributed to the problem.

Greg Cooper 2 years, 8 months ago

So Farm Bureau did not know in December how bad the deficit was going to be? Well, sir, neither did the entire state, since that little fact was hidden from the voters until after the elections and Sam took office. What was it, maybe a week after inauguration?

It's interesting to note that the predictions made right here, that property taxes and sales taxes would be tagged to make up some of the deficit, are now coming to fruition. That 258,000 taxpayers do not have to pay state income tax did not seem to be a concern to the Farm Bureau until that prediction arose as a "fix" for the deficit. Now we are seeing the low regard in which those business and farm owners are held by this junta.

Anyone who voted for self-interest in a misbegotten tax "reform" like ours needs to back up and reconsider the harm his self-interest has done to the state.

Reality bites, as the kids say.

Dorothy Hoyt-Reed 2 years, 8 months ago

While there were no specific numbers before the election, anyone paying attention knew there would be a deficit. Almost every month since the irresponsible tax change revenue collection was down, not by hundreds, but tens of thousands and millions. Most of the state wasn't paying attention, and some thought they were profiting from it, until they found out they weren't. Like someone else has pointed out on this forum, "Elections have consequences."

Greg Cooper 2 years, 8 months ago

"...anyone paying attention..." Therein lies the problem. The only thing voters paid attention to was what the Republicans told them. Truth and full disclosure were not forthcoming.

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