Tax strategy

The Kansas governor and Senate leaders are closer together on state budget matters, but differences still exist.

The governor and leaders in the Kansas Senate finally are on the same budget page — sort of.

Senate President Steve Morris and Vice President John Vratil announced Friday morning that they would push for $300 million in tax increases to close the budget gap for the fiscal year that begins July 1. They said their plan will include an increase in the state sales tax, elimination of some sales tax exemptions and higher taxes on tobacco and alcohol.

The Republican leaders of the Senate apparently have reached the same conclusion Gov. Mark Parkinson reached before his State of the State address: that the state can’t pass a responsible budget without a tax increase. In that speech, the governor also proposed increasing sales and cigarette taxes and eliminating sales tax exemptions.

Morris and Vratil announced their plan less than an hour before Parkinson’s scheduled press conference to announce additional budget cuts for the current fiscal year. During that press conference, Parkinson announced about $50 million in cuts, canceling highway maintenance programs in the state and KPERS death and disability payments and asking legislators to pass a primary seat belt law that would bring $10 million in federal funds into state coffers.

Then, the governor threw something of a curve ball to the legislators. He said he would support a sales tax increase to balance the budget, but that now would be his second choice. His first choice would be to cut tax exemptions and reverse some of the tax-cutting measures that he said had cost the state $9.5 billion since the Legislature went on “a tax-cutting binge” in the mid-1990s.

Parkinson cited the elimination of estate and franchise taxes, the lowering of property tax and the increase of sales tax exemptions from 30 to 99 in the last 20 years. Those measures have helped the state’s wealthiest Kansans, he said, while doing “nothing for the average person.” Tax cuts have benefited special interests, he continued, while leaving the state unable to properly fund public schools, higher education, public safety and the state’s safety net of social services.

The big area of agreement between the Senate leaders and Parkinson is the need to reduce tax exemptions, but the governor said he doesn’t think legislators could accomplish that goal. That being the case, his second choice is raising the sales tax, which has more often gained support.

The governor made strong and valid points about the state’s current financial condition being more than a product of the recession, but we hope he’s wrong about legislators’ ability to address some of the broader problems in the state budget, like sales tax exemptions. Morris and Vratil are attempting to show leadership with a tax proposal that probably will prove unpopular with their Republican colleagues, particularly in the Kansas House. They are trying to chart a responsible course through the current budget crisis and their plan deserves serious consideration and support.