Should Kansas increase taxes or control spending in order to balance its budget? On the editorial page of the Wichita Eagle yesterday, three editorials discussed the Kansas budget, taxes, and spending.
Rhonda Holman’s editorial featured Kansas Governor Mark Parkinson and his claims that the temporary one-cent sales tax used to fund the Intrust Bank Arena in downtown Wichita wasn’t noticed, and therefore didn’t harm the economy. The governor’s reasoning is incorrect, as taxes do indeed harm the economy.
When it was proposed in Wichita in 2002 to have a sales tax increase of one-half cent per dollar to build an arena, Wichita car dealers claimed that it would place them at a competitive disadvantage. So people and business do notice the effect of sales taxes.
While the geography is different — the proposed Wichita sales tax was to be only for one city, while the governor’s sales tax is for the entire state — the principle is the same: Higher taxes in Kansas will place our state at a competitive disadvantage.
This editorial also mentions “painful cuts to education” that have been made. More about that in a moment.
A second editorial was written by Bernie Koch, who is Executive Director of the Kansas Economic Progress Council. He takes the position that we can’t make additional cuts, concluding that “To simply rely on cuts will damage the institutions and systems needed to survive the Great Recession and pursue economic recovery.”
Referring to a SurveyUSA poll from last month, Koch wrote: “86 percent [of Kansans] said they were somewhat or very concerned about cuts to education.”
The problem with this poll is that the people of Kansas are very uninformed about school spending and cuts. First, there are plenty of cuts to be made, cuts that don’t affect the classroom. Recently the Wichita school district was able to find $2.5 million annual savings by adjusting transportation schedules at a small number of schools. Now that district is looking at savings that can be had in administration.
So when the Eagle editorial board and the governor claim that “painful cuts” have been made to schools, were those painful cuts made before transportation schedules were adjusted? Kansans should ask where these priorities are set.
Second, Kansans are simply uninformed — perhaps deliberately misinformed — about the level of school spending, as a poll conducted by the Kansas Policy Institute found. This poll, released last week, found that “fewer than one Kansan in 10 has a clear idea how much money schools actually receive — or spend — to educate elementary, middle and high school students across the state.”
Further, when informed about the true level of spending and the increase over the past five years, 81 percent of Kansans oppose tax increases for school spending. Only 11 percent were willing to pay increased taxes.
The third editorial was written by Kent Beisner, who is interim president and CEO of the Kansas Chamber of Commerce.
Beisner accurately diagnoses the cause of the problem: “The governor and his allies in the Legislature actually have the audacity to claim that recent tax cuts are to blame for the state’s budget deficit. But when the Legislature cut taxes earlier this decade, revenues to the state skyrocketed. The problem occurred when the state showed zero fiscal restraint and committed to spending more than it was taking in, erasing more than a $950 million budget surplus in just two years. Kansas most definitely does not have a tax-cutting or revenue problem.”
The way to get out of this problem is to control spending so that taxes don’t have to be raised. A low-tax environment is the best tool Kansas can use to attract and keep business, Beisner added: “If the Legislature adopts what will amount to the largest tax increase in the state’s history, states more competitive than Kansas will no doubt take advantage of our resulting anti-growth climate and lure our employers and workers out of the state.”
As always the question is do we cut or do we tax? To frame the issue though is not to do either. The need for reliable funding of the government coffers is to change the way in which we collect taxes and by broadening the base so that the rate is fairer across the board. So how is this possible? Use a “Fairtax” model for the state of Kansas and eliminate the waste and gaming of the system. Go to http://www.fairtaxkc.org and witness the research of Dr. Arthur Hall of KU , as Director of the Center for Applied Economics, and his state-level “Fairtax” model plan.
Tax pyramiding is a real problem that we must address forthright or we will continue to lose jobs in the state of Kansas that would otherwise be based here. If it were not for the patchwork of taxes that plague every small business and consumer by way of inflated pricing to cover the impact of taxes on productivity we wouldn’t even be in this mess!
We need the “Fairtax” model for Kansas!
The Kansas Supreme Court’s ridiculous Montoy decision on school spending was the beginning of the recent financial mess in this state. The Salina school district lawsuit against the state triggered roughly a billion in additional spending. If that spending growth had not occurred, the financial problem would have been contained.
This assumes that the legislature would not have spent this money somewhere else, and that is not always a safe assumption when the fiscal “moderates” (that Kansaspeak for liberal) control the purse strings in Topeka. Has anyone noticed that former Governor Sebelius is now accurately being described as a liberal within the far left Obama administration? Back here, the “moderate” Kansas press kept calling her a “moderate.” At least the liberal mainstream national press accurately describes her.
There are still a lot of her “moderate” political allies who are in both appointed and elected positions. Sebelius stacked the Kansas Supreme Court with far left judges and also appointed Kansas “moderates” to the State Treasurer and Attorney General positions.
Got my first quarter of this year finished and to the accountant yesterday. My corporate withholding for the State Unemployment fund had DOUBLED since last quarter. I have a tavern. Soon, if we do not get the exemptions on Parkinson’s smoking ban, I will lay off three part time employees, who depend on this job, and who contribute, from every paycheck, to the revenue of Kansas. Main Street businesses are the geese that have been laying the golden eggs. WE have not been the ones laying off workers. The government, in it’s infinite wisdom, has decided that killing the goose makes sense. We are the ones paying triple property tax rates, double electric, gas, and water bills, double insurance rates, and double cable bills. It’s alright, hell, we own a small business. What are we going to do about it? Trapped like rats, our only choice is to spend our way to bankruptcy, or just close our doors. Only big businesses get the tax breaks, while we get hammered to cover them. This government, who rewards failure, punishes those of us who work and contribute.
Thank you for sharing your personal dilemma. It is a disgrace to see the way our state government is treating the employers who employ most of us…small businesses. My fear is that you and many of your cohorts will begin looking outside our borders for states that respect the value you bring. Once you and other small business owners make those decisions it will be a state of public employees. Who will pay their wages then? It won’t be me as I’ll be right behind you. Keep letting your voice be heard as there are too many small business owners enduring in silence.