By Patrick Lowry
March 9, 2016
A bill that would subject owners of limited liability companies in Kansas to income taxes once again was introduced in the Senate this week.
That’s not surprising, as the absence of 330,000 LLCs from the state revenue stream is estimated to be $250 million a year and growing. What’s notable is who introduced it: Senate Vice President Jeff King, R-Independence, and Sens. Greg Smith and Jim Denning, both R-Overland Park. Considering King and Denning have links to ALEC, the American Legislative Exchange Council driving a significant number of state-government-shrinking and tax cut proposals nationwide, it is significant they’re breaking ranks with Gov. Sam Brownback.
In a Tribune News Service report, Denning said he thinks there are enough votes to pass a bill that would repeal one of the governor’s signature policies and begin to repair the structural problems caused by the 2012 tax cuts.
Of course, if there aren’t enough votes to override an almost certain veto, the legislation would be useless.
When asked about the bill, Brownback spokeswoman Eileen Hawley said: “As the governor has previously said, he will not support or call for a tax increase on small business in Kansas.”
Just how the governor has maintained such steadfast opposition to revisiting the unsustainable tax cuts has been a mystery to us, given the number of missed revenue forecasts, raids and sweeps of funds from highway and children’s programs, credit downgrades, cuts in funding to universities and public schools, delayed payments, IOUs and borrowed money to pay current bills.
We believe Senate Bill 463 reveals a couple of clues to that mystery. This legislation calls more than $500 million of sales tax revenue that annually is directed to the Kansas Department of Transportation for its T-WORKS program to instead go straight into the general fund. So would all the money the state receives from casinos, economic development funds, and the tobacco settlement money currently paying for programs and services that target the physical and mental health, welfare, safety and overall well-being of children in Kansas.
The bill would abolish the Children’s Initiative Fund and the Kansas Endowment for Youth Fund, and create a new Children’s Cabinet whose majority of voting members would be appointed by the governor to make spending decisions regarding however much money is released from the general fund.
Moving all that money into the general fund would relieve all the pressure currently presented by revenue shortfalls — and perhaps generate enough dollars to shore up the constitutionally inadequate funding being provided to public schools.
And more money might be on the way. In a hearing on SB 463, Shannon Cotsoradis, president and chief executive officer of Kansas Action for Children, suggested something far more nefarious was taking place behind closed doors. As the Topeka Capital-Journal reported, Cotsoradis alleged Brownback’s administration was contemplating a “securitization” of future tobacco settlement payments worth close to $600 million to be sold for a one-time payment of $400 million that would go straight into the general fund.
No wonder the governor doesn’t see the need for repealing the income tax cuts. He’s moving the Bank of KDOT right into the Statehouse and sacrificing the future of Kansas children — particularly the most needy.
Of course, both Brownback and Hawley deny the state’s planning to sell off the tobacco settlement. There was an admission, however, that a presentation was made to do just that.
And the language in SB 463 places all CIF, KEY and DOT dollars directly into the general fund, out of which Brownback already has been given unilateral authority by the Legislature to allocate however he sees fit when facing a deficit.
Brownback and his legislative lackeys are destroying the state economy, sacrificing the future of Kansas children, and mocking even those who elected them — all in a futile attempt to make the governor’s experiment work.
It makes us wonder whether the income tax repeal bill mentioned above is just a ruse to provide cover for lawmakers through this election cycle. We’ll put nothing past the cronies running Topeka and ruining Kansas.