Yesterday in Topeka Kansas Senator Ty Masterson, a Republican from Andover, laid out a plan for generating revenue for the state that doesn’t involve raising taxes: The state could sell some of its assets.
Masterson spoke to about 400 citizens as part of the Kansas Defending the American Dream Summit 2010. This event was produced by Americans for Prosperity-Kansas.
Starting in January, Masterson said he asked researchers to compile a list of state-owned assets. Three months later he received a rough draft, with the lead researcher saying he was dumbfounded by the project, as the state doesn’t know what it owns.
State agencies have become kingdom builders, Masterson said, and we began to lose track of the state’s assets. The draft report indicates the state may own between $12 billion and $16 billion in assets.
“Every responsible business evaluates what it has in hard assets, and decides whether or not to continue maintaining it,” he said.
Referring to these assets’ ability to generate revenue for the state, Masterson told the audience that selling just one percent of these assets could generate $120 million to $160 million for the state. (The commonly-cited budget “gap” Kansas is facing is around $500 million, although that number is based on funding the governor’s desires for increased spending. The actual gap is much less.)
Selling assets also reduces operational costs, he added.
There is also a huge unfunded liability in KPERS, the Kansas state employee retirement plan. The state has income-producing assets that could be sold to KPERS. This would produce immediate revenue for the state’s general fund, and provide KPERS with an investment that produces revenue over the long term.
In other remarks Masterson reminded the audience that the leadership of the Kansas senate is not conservative, and it may not be possible to gain a majority of votes for a budget plan that does not raise taxes.
Masterson told the audience its help is needed. “We need you to counter the propaganda machine telling people they will be harmed if taxes are not increased.” People tell him “I want you to raise my taxes,” believing their children will be harmed unless taxes are raised, but these are not the correct facts.
“It is a spending problem that we have,” echoing other speakers at the event. Kansas state general fund spending in 2006 was $5.139 billion. Three years later in 2009 it was $6.4 billion. The budgets being talked about now are still several hundred million dollars higher than 2006 spending. The propaganda being spread, however, tells Kansans that spending and services are being cut.
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