by Murrel Bland
It will be one of the biggest tax shifts in the history of the state of Kansas. The Kansas Legislature approved, by a very close margin, a one-half cent increase in the sales tax to cover the significant loss because of decreased income tax from businesses. That will hurt the working folks in Wyandotte County the most.
It all started in 2012 when Gov. Sam Brownback proposed -and the ultra-conservative legislature approved–a dramatic shift that allowed businesses to escape paying income taxes. That was supposed to bring in hordes of new businesses to the state. It didn’t. What it did do is cause existing businesses — more than 300,000 that IRS classified as “S corporations” — to make a raid on the state treasury.
Gov. Brownback was under the illusion that Kansas could compete with those states that do not have an income tax — such as Texas, Wyoming or Florida. What those states have — that Kansas doesn’t have — is either substantial tourism or large mineral and oil deposits, or both.
Kansas has traditionally had a balance among three basic taxing sources —property, income and sales. Property taxes are the most stable and sales taxes are the most fluid; income taxes are some place in the middle. The analogy is made that Kansas taxes are like a three-legged stool. Pull any one of those legs off, and you have serious problems.
One of the basic disagreements in the recent legislative session was whether the income tax would be restored or if the sales tax would be hiked. The governor and his very conservative allies won out — at least for now.
The ultra-conservatives — the Tea Party crowd — have control of the legislature. However, not all of the conservative legislators are happy with the governor; the $15.3 billion budget that he approved didn’t cut enough spending, certain ultra-conservatives alleged.
Last spring I was at a luncheon of the William Allen White Foundation in Lawrence. I was sitting at the table with two very prominent Kansas editors — Dave Seaton and Susan Lynn.
Steve Morris, a former moderate Republican senator, was also at the table. Larry Powell, an ultra conservative, defeated Morris in the 2012 primary election. Morris said about 15 ultra-conservatives would have to lose to regain control of the Kansas Senate.
Seaton, whose family has deep roots in the Kansas newspaper and business and politics, told of grass roots efforts in his hometown of Winfield to get more responsible legislators elected, whether they are moderate Republicans or Democrats. I would hope that there are similar efforts in other parts of the state.
Murrel Bland is the former editor of The Wyandotte West and The Piper Press.