Are You a Second Class Kansan?
By Karl Peterjohn, Kansas Taxpayers Network
The Kansas legislature is in the process of deciding how wide the separation will be between various classes of Kansans. State Senator Peggy Palmer, R-Augusta, and State Representative Judy Morrison, R-Shawnee, introduced bills in their separate legislative houses that would have exempted social security payments from the Kansas personal income tax this year.
Both bills attracted numerous co-sponsors for this tax cut proposal with a $19 million price tag. The intent was to eliminate the disparate treatment that exists in Kansas income tax law that exempts government pensions while taxing social security. Private pensions in Kansas are also taxable, but this bill does not address the entire disparity, just the social security portion.
So government employees are granted a large tax break while citizens working in the private sector are expected to pay more. What is particularly outrageous about this disparity is the fact that folks with modest social security and private pensions are already paying substantially more in Kansas income taxes than, say a retired Kansas Supreme Court justice or a retired university professor.
Now, everyone who pays into social security will be charged at both ends. They are taxed on their income when paying into social security while they are also taxed when receiving a social security check. Public employees are only taxed when they pay into their KPERS state/local pension contributions, but their government pension checks come back tax free.
The private sector pensions and social security payments are taxed. In addition, additional state tax funds are needed by the state to make up for the unfounded liabilities within KPERS. Another pension cost is for the occasional “bonus” checks the legislature provides to government retirees that are most frequent in the fall of even numbered years when elections are pending. That price tag is another burden for the second class private sector citizen to pay in Kansas. The private sector also lacks civil service job protections too.
Opposition to the Palmer-Morrison bills is coming from self-described “moderates” in both parties who are worried about excessive tax cuts as they get ready to debate whether state spending should grow as much as 9 percent and top $6 billion in the General Fund for the first time, or some smaller amount that might increase state spending by “only” 4.5 percent. Should state spending grow $250 million (4.5 percent) or over $500 million?
Liberal Senator Janis Lee, D-Kensington, opposes exempting social security in the senate tax committee. Senator Lee believes that many low income folks are already exempt and this proposal would benefit, “the rich.” Apparently, the middle income folks with private pensions and social security should continue to pay more than retired bureaucrats and university professors from the Regents Institutions.
In Kansas, the citizens who have worked in the private sector are second class citizens expected to pay more than their more affluent neighbors with government pensions. This is unfair. This is another reason that private sector Kansans have a tendency to retire to states with more equitable fiscal climates.