By Jonathan Shorman
April 1, 2015
A day after the state reported less-than-expected revenue, opponents of Kansas’ income tax cuts brought their message to the Capitol as policymakers at times physically loomed over the discussion.
In a second-floor event Wednesday feet away from the governor’s office, the groups urged lawmakers to repeal the income tax changes championed by Republican Gov. Sam Brownback in 2012 and 2013.
“We’re here today calling on policymakers and the governor to acknowledge the adrenaline shot isn’t coming and time’s up on the tax cuts,” said Annie McKay, director of the Kansas Center for Economic Growth.
Brownback offered no such mea culpa.
Spotted walking through the building a few minutes before the event began, the governor in a brief interview touted the state’s individual income tax receipts. On Tuesday, the Department of Revenue announced tax receipts for March were about $11 million below expectations. But individual income tax receipts were $8.7 million above expectations.
“I hope you notice the personal income. That was the one we cut. We increased sales tax, or we kept the increase that was in place. We increased severance tax,” Brownback said, referring to previous legislation.
Oil and gas tax revenue came in $5 million below expectations, with sales and use tax receipts $7.8 million below expectations. Corporate income tax was also $8.2 million below projections.
“The ones they’re asking to repeal are the ones that are stable and up,” Brownback said.
Kansas faces a projected revenue shortfall of about $600 million when the new fiscal year begins July 1. Lawmakers are attempting to craft a budget that takes the shortfall into account.
Brownback — who wants Kansas to eventually join a handful of other states that have no income tax — has called on Kansas to move toward consumption taxes. But a major consumption tax, sales tax, came in below expectations in March.
The governor said that sales tax revenue is up compared to a year ago, however. Figures from the Department of Revenue show sales tax revenue in March up 0.3 percent compared to the previous fiscal year and up 2.1 percent for the year.
“Long-term it’s much more stable based on consumption taxes. It’s a broad-based tax paid by everybody traveling in the state, in the state,” Brownback said. “Nine states have found ways to do those and they generally grow their social services more when you’ve got a pro-growth atmosphere you give money to social services, which is what a lot of groups are concerned about is social issues, which I’m concerned about.”
Former budget director Duane Goossen, who has been critical of the administration’s tax policies, told the crowd the state won’t be financially healthy without more revenue. The state doesn’t have enough revenue to cover ongoing expenses, he said.
“The problem we have — a big gap between expenses and revenue — has been caused by steep and dramatic income tax cuts,” Goossen said.
The speeches reached lawmakers, lobbyists and administration officials milling around on the third floor.
As the event began, state budget director Shawn Sullivan leaned against the rotunda rail, looking down on the crowd of about 100 below as he chatted with David Kensinger, the lobbyist and former Brownback chief of staff who received a preview of the governor’s budget proposal weeks before it was made public.
Brownback in his budget proposal asked lawmakers to approve increases on tobacco taxes, but The Wichita Eagle reported last week Kensinger has been lobbying against the proposed increases on behalf of a tobacco company.
So far, legislation to raise tobacco as well as liquor taxes hasn’t progressed far in either chamber. Senators and representatives are currently negotiating multiple times a day in an effort to strike a budget deal, though a final compromise hasn’t been reached.
“I hope policymakers have the courage to acknowledge the great experiment hasn’t produced the desired results,” said Shannon Cotsoradis, director of Kansas Action for Children.