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Opinion column
by Murrel Bland
Money—or the lack of it—was a main topic of discussion at the monthly meeting of the Legislative Committee of the Kansas City, Kan., Area Chamber of Commerce Friday morning, Sept. 11.
Kathy Damron, the lobbyist for the chamber, said the balance in state coffers of about $50 million at the end of about two months into the new fiscal year, didn’t indicate that the state was in particularly good financial shape. She said that a balance of about $200 million would have made state officials much more comfortable. Revenue is falling short of projections, she said. The new fiscal year began July 1.
Damron reported on a recent decision by a three-judge district court panel in Shawnee County that directed that Kansas public schools would receive an additional $50 million. She said that this move would probably affect a decision on a larger school funding case that is before the Kansas Supreme Court. School districts including Kansas, City, Kan., have alleged that the present state formula is unfair because it doesn’t provide adequate funding for school districts to provide a suitable education for students.
The current $15.3 billion state budget is a record amount. It provides for a massive shift of income tax to sales tax. The ultra-conservative legislature supported Gov. Sam Brownback in this shift. This move was supposed to attract new businesses and workers to the state. So far, this effort has not been that successful. Moderate Republicans and Democrats are saying that the increase in sales tax is hurting those who can least afford it—like the working poor. Ultra-conservative Republicans say that this effort of less income tax needs time to work.
There was also an extended discussion at the chamber’s committee about the payday lending industry. Craig Gaffney, a senior executive with Country Club Bank and a member of the chamber’s board of directors, introduced Ken Williams, the president of Catholic Charities of Northeast Kansas.
Williams told how people get trapped by payday lenders who use a recurring service fee that can amount to as much as 400 percent. Williams said that those who use payday lenders are not just very poor people; many are members of the middle class. Gaffney said Country Club Bank is helping some of these people by loaning money so they can get out of the trap; such persons are required to take a money management course.
One of the larger payday lenders in the country is owned by QC Holdings that had its roots in Kansas City, Kan.; its corporate headquarters is now in Overland Park. The company, which claims to have about 500 locations in 23 states, is publicly traded; its president, Darrin Andersen, received a total compensation of $711,625 for the fiscal year of 2014 according to the Reuters news service. QC Holdings has two loan stores in Kansas City, Kan.—one on Central Avenue and the other in the Rosedale community according to its Internet site.
Those in the payday industry say that people need loans to pay for such necessities as an electricity bill or food. They justify their high interest rate pointing out a high default rate. QC Holdings reported its default rate in the second quarter of 2015 was 33.2 percent.
Concerning other issues, Greg Kindle, the president of the Wyandotte Economic Development Council, expressed concern about origin and destination sales tax. Kansas law says that if someone (such as a resident of Overland Park) buys an item at a Kansas retailer (such a Nebraska Furniture Mart) and takes it home, then the sales tax benefits Kansas City, Kan. However, if that Overland Park resident has the item delivered, then Overland Park collects sales tax. Kindle said if all sales tax were “origin-based,” Kansas City, Kan., would benefit.
Murrel Bland is the former editor of The Wyandotte West and The Piper Press. He is the executive director of Business West.