By Tim Carpenter
April 27, 2016
A coalition of Kansas education, transportation, early-childhood and tax policy organizations Wednesday urged lawmakers to repeal state income tax cuts signed by Gov. Sam Brownback and blamed by some for two years of budget instability.
The organizations appearing at the Capitol as the House and Senate returned after a five-week break have all previously condemned the financial consequences of the state’s 29 percent reduction in the top individual income tax rate and the repeal of income tax on owners of more than 330,000 businesses adopted.
Currently, the state has a $228 million gap between projected revenue and planned spending over the next 15 months.
Brownback responded to the deficit by proposing the shortfall be addressed by withdrawing $185 million in transportation allocations, halting a $100 million pension payment, extending a $17 million cut to higher education and selling future annual tobacco company payments for $150 million.
Two other deficit-closing options offered by the governor delved deeper into state appropriations and sliced into aid to K-12 public schools as well as community colleges.
“Unfortunately, none of the options offered to the Legislature last week address the state’s long-term fiscal woes,” said Annie McKay, executive director of the Kansas Center for Economic Growth. “The only proposal lawmakers should be willing to accept is one that will restore our state’s financial stability and allow us to once again invest in our future.”
The second-term Republican governor said the Legislature shouldn’t waste time during closing days of the 2016 session with bills to to raise taxes on individuals or businesses. Repeal of the business tax break could generate $200 million to $250 million annually for the state.
The debate on these issues will lead to a campaign cycle with all 40 Senate seats and the 125 House seats up for grabs in November. In 2015, Republicans in both chambers voted to close a deficit by raising the statewide sales tax and eliminating most deductions.
Others in the tax-reform coalition were Kansas Action for Children, Kansas Organization of State Employees, Kansas Contractors Association and Kansas-National Education Association.
K-NEA lobbyist Mark Desetti said state legislators and Brownback promised stable funding of K-12 public education when they voted to repeal the state’s school-finance formula and replaced it with a block-grant system.
“Now we are on the edge of another broken promise to our children and teachers,” he said. “As our schools drop days from their calendars, reduce to a four-day week and eliminate valuable programs and staff positions, we cannot be more certain that there must be an option four — an option our governor continues to sidestep.”
He said state government leaders must return to a stable, dependable and fair tax system.
“The definition of insanity, it is said, is to continue doing the same thing and expecting different results,” Desetti said. “It’s time to step away from the Kansas tax insanity.”
Shannon Cotsoradis, of Kansas Action for Children, said there were deep flaws in Brownback’s proposal to earmark about $42 million of $58 million received annually by Kansas from the national tobacco company settlement for early-childhood education in the Children’s Initiatives Fund.
She expressed reservation about the administration’s proposal to sell to investors the remainder of annual tobacco payments, in perpetuity, for a one-time infusion of $150 million to the state treasury. The process is referred to as securitization, which would allow Kansas to use proceeds from the deal to close the latest budget gap.
“The CIF is the cornerstone of funding for our early care and education system in Kansas,” she said. “There are clear problems with the securitization component. What I find concerning about all these proposals is that the governor presented them as if they were all free of long-term consequences. That is simply, blatantly untrue.”