December 10, 2016
On Wednesday, the Kansas Center for Economic Growth held a rally at the Capitol to announce a tax proposal designed to address the state’s fiscal crisis. KCEG presented the plan in conjunction with Kansas Action for Children, the Kansas Contractors Association, Kansas Organization of State Employees and Kansas-National Education Association – a coalition that calls itself “Rise Up Kansas” and has been developing the proposal since last summer.
Regardless of what you think about this particular proposal, isn’t it refreshing to see specific recommendations that give lawmakers, advocates and citizens something to discuss? Instead of offering vague language about how Kansans are “angry” or “ready for change,” the leaders of Rise Up Kansas are willing to confront an uncomfortable reality that many politicians (especially in a state like ours) assiduously avoid: we have to raise taxes.
Under the current tax structure, every Kansan who makes more than $15,000 per year pays an income tax rate of 4.6 percent (those who make less than $15,000 pay 2.7 percent). The Rise Up Kansas plan would maintain these rates for those who earn up to $39,999 while increasing the rate to 6.45 percent for those who make $40,000 or more. It would also end what Gov. Sam Brownback calls the “march to zero” – his promise to eliminate income taxes altogether. According to the coalition, restoring the top income bracket to 6.45 percent and repealing the LLC exemption would generate $721 million in revenue for fiscal year 2018.
Rise Up Kansas also suggests transferring $200 million from the Kansas Department of Transportation to the state general fund – a move that would be paid for by increasing the gas tax by 11 cents per gallon (bringing the total to 35 cents per gallon). However, the coalition’s plan doesn’t just include tax increases – it would also reduce the food sales tax from 6.5 percent to 5 percent (a move Rise Up Kansas expects to cost $100 million). Overall, the coalition says its plan would bring in around $820 million in tax revenue.
While it’s necessary to restore the income tax rate to a reasonable level and reverse Brownback’s “march to zero,” we’re concerned about the gas tax – especially considering the number of Kansans who live near the Missouri border. Although gas prices are low right now (which is why we mentioned the possibility of a higher gas tax last month), legislators must be careful not to implement counterproductive revenue solutions. We don’t want consumers refusing to patronize Kansas businesses because a cheaper product is only a few miles away. Plus, the gas tax would put strain on the very families that the reduced food tax is supposed to help.
All of these issues will be debated at length in the coming months, and we welcome the conversation. It’s too late for comforting euphemisms and generalities about our state’s budget problems – Kansans deserve new ideas and transparent dialogue. Even if you disagree with the Rise Up Kansas coalition, its leaders deserve credit for being honest about the problem and formulating a way to fix it.