MANHATTAN, Kan. - After giving Secretary of Revenue Joan Wagnon and Governor Parkinson the cold shoulder last week, the Senate Assessment and Taxation Committee appear to have had a change of heart on Wednesday and introduced the tax bills they had declined to introduce last week: Governor Parkinson's 1% sales tax increase and increasing the cigarette and tobacco tax to national levels.
Observers interpreted the committee's actions last week as a signal that working to solve the state's $400 million revenue shortfall in the next fiscal year was going to be contentious as it was the first time in most observer's memories that a committee did not give the Governor the courtesy of introducing his or her legislation.
Wednesday's action by the committee means that the bills have now been introduced in both the Senate and House.
On the House side, the Tax Committee announced it will hold a public hearing today (Thursday 21 January) and next Tuesday on the Gov. Parkinson's proposed sales tax increase.
Tax Committee Chair Richard Carlson (R-St. Marys) had listed the agenda as a committee discussion but he too changed course yesterday afternoon announcing that the committee would hear first from proponents and then opponents next week. Various state groups including the coalition partners in Kansans for Quality Communities will be on hand to speak in favor of the proposals.
Parkinson's proposal to increase the state sales tax by one cent would generate an estimated $350 million in yearly revenues for the state. While many consider sales tax inherently regressive because of its negative impact on people with limited incomes, the Republicans show no interest in taking up the Democrats proposal of raising income taxes, which would affect people based on the ability to pay.
In other actions, the Senate Ways and Means Committee advanced a bill containing the Governor Parkinson's recommendations to balance the current year budget. The bill would put into effect aspects of the Governor's November allotments that required legislative action.
Two relative minor amendments generated a lot of debate on the bill.
Senator Jay Emler (R-Lindsborg) amended the bill with a proviso limiting legislator's franking privileges to 50% of what is allowed under policy, providing a saving of $125,000 for the state.
Franking privileges refers to a mail allowance that legislators have to communicate with their constituents. The franking allowance in Kansas is already so small that it does not even allow a Senator to send out one newsletter to all his or her constituents. In fact, Sen. Carolyn McGinn (R-Sedgwick) admitted she uses her franking privilege to send mail to only Republicans voters, which raises ethical issues of the use of state funds.
Senator John Vratil (R-Leawood) amended the bill by reducing the cut to the legislative branch of government by $1.1 million, leaving a cut of $1.6 million to the legislative branch. Vratil felt that all three branches should be subject to similar cuts in funding. Whereas the cut to the administrative and judicial branches was about 5% of the budget, the cut to the legislative branch was about 10%.
Vratil expressed concern that with the full cut, there would only be enough money for a session of 83 days as opposed to the normal 90-day session. While the amendment passed, Senators Laura Kelly (D-Topeka), Mark Taddiken (R-Clifton), and Jean Schodorf (R-Wichita) voted no.
In a move that would essentially increase local taxes, Senator John Vratil introduced Senate Bill 385 that enacts the "temporary education economic recovery act." Under the provisions of the bill, school districts could make up the difference between the statutory state per pupil base aid amount and the actual amount appropriated by increasing local property taxes as an additional local option budget amount. The additional local option budget in the bill would be equalized.
The bill would continue the Republican habit of passing taxation on to the local level, thus further increasing property taxes and creating an unequal funding mechanism for public education.
For more information on the issue of finding solutions to the state's financial crisis, listen to the podcast of Community Bridge's 21 January show featuring: Mark Desetti, Director of Legislative Advocacy for KNEA and Matt Fletcher, Associate Executive Director, InterHab. To listen simply click the start button on the play panel or download the MP3 file by clicking on it.
Source information in this article came from the KNEA, @rjwilson, and @FWKS.
Sales tax and property tax are the most regressive tax sources we have. The only redeeming value for property tax is that it is not as volatile as yearly income taxes. That makes it a dependable means for providing revenue for local infrastructure services.
Sin taxes are a no win situation. Do we promote the sin or take advantage of the sinner? Or, do we pass legislation (ban smoking) that dries up the source of revenue. Hmmm— we don't have to worry about that. Legislation against sin has never been very effective.