Voice For Liberty

Tag: Kansas legislature

Articles about the Kansas legislature, both the House of Representatives and the Senate.

  • Business tax credits more desired than zero tax rates

    Economic developmentA Kansas business welfare program is more attractive and valuable than elimination of the Kansas corporate income tax, at least for some influential corporations in Kansas. The program is High Performance Incentive Program (HPIP), which grants tax credits in exchange for capital investment.

    In April Dr. Art Hall of the Center for Applied Economics at the Kansas University School of Business delivered a presentation on Kansas tax reform, and he explained the situation (video here):

    There is something called an HPIP investment tax credit. It stands for High Performance Incentive Program. This is a very valuable tax credit to corporations. But, you don’t get it automatically. You have to apply to the state. Only about 100 or 125 of these credits are given out each year. It’s about $50 to $60 million per year. It’s a very large number. Back in 2011, … the plan was to get rid of all of these special deals, especially this one credit, and we’re going to reduce all the rates.

    The corporate sector — some very influential people in the corporate sector — did not want that at all. They went to the mat, hard. … The point is, there was an effort to reduce corporate income tax. The corporations, at least a very strong constituent sector, didn’t want it. They wanted their credit.

    In other words, the business welfare benefits these corporations — many thought to be in the aerospace industry — receive from the state is greater than the Kansas income tax they pay. That’s the only conclusion we can draw from their choice of favoring the HPIP credits over elimination of their Kansas income tax.

    A table from Hall’s paper Embracing Dynamism: The Next Phase in Kansas Economic Development Policy holds calculations that reveal this effect.

    hpip-credits-example-2013-07

    The 11.92% that is highlighted in yellow shows the deformation of the business investment and tax landscape that causes some corporations to prefer HPIP tax credits over zero tax rates. Each row in the table represents a different scenario, one being retaining the HPIP credit. Columns represent various amounts of investment. It is in the column for the largest amount of investment that HPIP is most valuable, based on expected rate of return for the investment. HPIP is also more valuable than the strategy in any other row, considering the large investment column. HPIP, we can see, favors large corporations over small, as it is most valuable when making large investments.

    A problem, as Hall told the audience in the video, is that the HPIP is not given automatically to all companies that make capital investments. The credit must be applied for, various conditions must be met, and approval received.

    This system of selecting which companies receive targeted economic development investment in Kansas is contrary to market principals. The state, rather than markets, is making investment decisions. It’s also contrary to Hall’s economic dynamism concept explained in the paper referenced above. In this idea, the goal of the state is to encourage a large number of business startups each year, and then nurture conditions where all have a chance to thrive. Many will not survive, but some will. We don’t know which firms will thrive, so it’s important to treat all firms equally and give all a chance.

    Programs like HPIP are contrary to this philosophy, and instead concentrate the state’s investments in existing, often large, companies — the companies that make the large capital investments for which HPIP returns the most favorable financial results. This is also an illustration of the difference between a business-friendly environment and capitalism.

  • For Kansas progressives, it’s all about school spending, not performance

    Once again, Kansans are subjected to a rant by Kansas House of Representatives Democratic Leader Paul Davis. On Facebook, he continually complains about the lack of funding for Kansas schools, recently writing “What do you think is more important: tax cuts for millionaires or funding for your local school?”

    paul-davis-facebook-2013-07-14

    Here are some concepts I wish Davis would explain to his Facebook fans. This might be good practice as he considers a run for the Kansas governorship.

    First, Kansas schools have increased employment.

    Second, Kansas schools don’t spend all the money they’ve been given, and the pile of unspent cash continues to grow far beyond what is needed for cash flow management.

    Third, everyone’s taxes have been cut in Kansas.

    But here’s the worst thing Kansas has done. It’s a fact that Paul Davis won’t tell you, and it’s something that is very harmful for Kansas schoolchildren: At a time when Kansas was spending more on schools due to an order from the Kansas Supreme Court, the state lowered its standards for schools.

    This is the conclusion of the National Center for Education Statistics, based on the most recent version of Mapping State Proficiency Standards Onto the NAEP Scales.

    This project establishes a relationship between the tests each state gives to assess its students and the National Assessment of Education Progress, a test that is the same in all states. As explained in Kansas school standards and other states, Kansas standards are relatively low, compared to other states.

    naep-reading-changes-2009-kansas

    For Kansas, here are some key findings. First, NCES asks this question: “How do Kansas’s NAEP scale equivalent scores of reading standards for proficient performance at grades 4 and 8 in 2009 compare with those estimated for 2005 and 2007?”

    For Kansas, the two answers are this (emphasis added):

    “Although no substantive changes in the reading assessments from 2007 to 2009 were indicated by the state, the NAEP scale equivalent of both its grade 4 and grade 8 standards decreased.”

    Also: “Kansas made substantive changes to its reading grade 8 assessment between 2005 and 2009, and the NAEP scale equivalent of its grade 8 standards decreased.”

    In other words, NCES judged that Kansas weakened its standards for reading performance.

    naep-math-changes-2009-kansas

    A similar question was considered for math: “How do Kansas’s NAEP scale equivalent scores of mathematics standards for proficient performance at grades 4 and 8 in 2009 compare with those estimated for 2005 and 2007?”

    For Kansas, the two answers are this (emphasis added):

    “Although no substantive changes in the mathematics assessments from 2007 to 2009 were indicated by the state, the NAEP scale equivalent of its grade 8 standards decreased (the NAEP scale equivalent of its grade 4 standards did not change).”

    Also: “Kansas made substantive changes to its mathematics grade 4 assessment between 2005 and 2009, but the NAEP scale equivalent of its grade 4 standards did not change.”

    For mathematics, NCES judges that some standards were weakened, and some did not change.

    In its summary of Kansas reading standards, NCES concluded: “In both grades, Kansas state assessment results showed more positive changes in achievement than NAEP results.” For mathematics, the summary reads: “In grade 4, Kansas state assessment results showed a change in achievement that is not different from that based on NAEP results. In grade 8, state assessment results showed a more positive change.”

    In other words: In three of four instances, Kansas is claiming positive student achievement that isn’t apparent on national tests.

    Kansas is not alone in weakening its standards during this period. It’s also not alone in showing better performance on state tests than on national tests. States were under pressure to show increased scores, and some — Kansas included — weakened their state assessment standards in response.

    What’s important to know is that Kansas school leaders are not being honest with Kansans as a whole, and with parents specifically. In the face of these findings from NCES, Kansas Commissioner of Education Diane M. DeBacker wrote this in the pages of The Wichita Eagle: “One of the remarkable stories in Kansas education is student achievement. For 10 years straight, Kansas public school students have shown improvement on state reading and math assessments.” (Thank teachers for hard work, dedication, May 27, 2011.)

    A look at the scores, however, show that national test results don’t match the state-controlled tests that DeBacker touts. She controls these states tests, by the way. See Kansas needs truth about schools.

    A year later a number of school district superintendents made a plea for increased funding in Kansas schools, referring to “multiple funding cuts.” (Reverse funding cuts, May 3, 2012 Wichita Eagle.) In this article, the school leaders claimed “Historically, our state has had high-performing schools, which make Kansas a great place to live, raise a family and run a business.”

    These claims made by Kansas school leaders are refuted by the statistics that aren’t under the control of these same leaders.

    I wonder why Paul Davis doesn’t write about these topics on Facebook.

  • Part of Kansas tax law has something for everyone

    Kansas LegislatureThe just-signed Kansas tax bill contains a future provision that, based on recent research, may satisfy everyone.

    As described by Kansas Legislative Research:

    Future formulaic income tax rate relief could be provided under certain circumstances, beginning as early as tax year 2019, based on the extent to which a specified group of SGF tax sources has increased over the previous fiscal year. Generally, rate relief will be triggered under the formula once that group of taxes exceeds the previous fiscal year’s levels (beginning with FY 2018 growth over FY 2017) by 2 percent or more.

    What will happen — may happen — is that when state general fund tax receipts increase by more than two percent, some of that increase will be used to “buy down” individual income tax rates.

    This is a form of a policy known as tax and expenditure limits, or TELs. These have been implemented in many states, and in many different forms. Kansas has not had a TEL, but starting in fiscal year 2019, we may have one.

    While not specifically promoted as a TEL, this law has the same effect: Instead of spending increased tax revenue, that revenue will be given back to taxpayers in the form of lower rates. Sort of, because the state will spend the first two percent, and then tax rates are reduced by something less than the margin above that.

    This may happen, or it may not. Fiscal year 2019 doesn’t start for five years and two weeks. A lot may happen between now and then, including several elections. The legislature also may ignore laws it doesn’t like, as when it has sometimes violated the law requiring a 7.5 percent ending general fund balance.

    But either way, this TEL has something to benefit everyone. Spending hawks can point to this as an step in reigning in government spending — even if it’s in the distant future.
    state-local-spending-tel-cover

    Those who like government spending can take comfort in this: According to recently released research published by American Enterprise Institute, laws like this don’t have have their intended effect.

    The executive summary for its paper State and local spending: Do tax and expenditure limits work? reads:

    Since 1978, 30 states have enacted formal limitations on taxes, budgets, or outlays as tools with which to strengthen fiscal discipline. These tax and expenditure limits (TELs) vary substantially in terms of their details, definitions, and underlying structures, but the empirical finding reported here is simple and powerful: TELs are not effective.

    A little later:

    The almost-universal weakness of TELs is striking, but the empirical evidence by itself does not explain these findings. In part, it is likely that the limits themselves are the products of the same political pressures and election dynamics that yield fiscal outcomes. Moreover, the competition among political interests that results in budget outcomes also is likely to weaken or circumvent limits that otherwise would be effective. This raises a larger overall question: what are the sources of government growth? Five hypotheses are discussed in this study, the upshot of which is that TELs by themselves are unlikely to affect the demand for or the cost of government spending. …

    It is likely to be the case that such mechanical tools as TELs cannot substitute for the hard work of long-term public education and persuasion about the central benefits of limited government. In the long run under democratic institutions, popular will is likely to impose sharp constraints on the behavior of government; this means that attitudes must be changed through a process of debate and enlightenment.

    So there’s something for everyone: Passage of a law that (on the surface) looks good to one group, but one with little ability to produce its stated goals, which should placate the other group.

  • Kansas university spending and funding

    kansas-regents-logo

    In response to a small decrease in Kansas university funding in next year’s budget, there’s been a bit of overreaction. Consider this Wichita Eagle editorial: “The higher tuition just forced on state universities by the Legislature effectively is a tax increase that will deepen loan debt for some Kansans and put college out of reach for others. And a $66 million cut to higher education is no way to ‘grow’ an economy.”

    Examine the assumptions underlying this:

    1. The only possible response to a small cut in state funding is for universities to raise tuition.

    2. If students have to pay more of the cost of their college education, it’s a “tax increase.”

    3. The response of students to higher tuition will be to increase their student loan borrowing or avoid college.

    4. Spending on universities — as opposed to letting people spend and invest their own money — is the better way to grow the Kansas economy.

    The most nonsensical of these is the claim of “tax increase.” Taxes are paid involuntarily. Attending college is a decision. Asking working Kansans to pay more for students to attend college: That is taxation.

    Aside from this, Kansas regents universities — as is the case almost universally — have been increasing spending and tuition. Analysis by Kansas Policy Institute shows that for most Kansas regents universities, spending and tuition increases rise faster than inflation. Many times faster, in some cases. The KPI study is A Historical Perspective of State Aid, Tuition and Spending for State Universities in Kansas.

    Below, Kansas Representative Marc Rhoades, who is Chair of the House Appropriations Committee, explains more about the funding and spending of Kansas regents universities, and recognizes the Washington Monument strategy employed by KU in an effort to shape public opinion on this matter. It worked on the Wichita Eagle editorial board.

    Asking Questions of Higher Education

    By Kansas Representative Marc Rhoades

    Year after year, despite unchanged or increased state funding, the six state-funded Kansas colleges increased tuition far above inflation with little scrutiny. Undergraduate tuition and fees at the six universities increased 137 percent between 2002 and 2012. From 2002 to 2012, KU raised fees and tuition by 194 percent; KSU by 170 percent; and WSU by 117 percent.

    Universities’ All Funds spending was $1.814 billion in 2005; $2.186 billion in 2008; and $2.421 billion in 2012 — a 33 percent increase in spending even with a recession.

    Since 2003, unencumbered carryover cash balances in two student fee accounts increased by $248 million. In other words, they collected almost a quarter-billion dollars more in fees than they spent on whatever the fees were earmarked to do. General Fees plus interest earned on those accounts can be used for other purposes — say, for example, holding down tuition increases. Instead, students paid more in fees and more in tuition and the fee accounts kept accumulating.

    This year the legislature examined the numbers and asked questions with a desire to initiate an open conversation about higher education spending, tuition and student outcomes.

    The end result: a 1.5 percent reduction to Regents which hardly qualifies as a slash, but that’s the narrative being used; and since State Aid represents less than half of their General Use Expenditures, a 1.5 percent reduction in their State Aid amounts to a 0.7 percent reduction to that account.

    Compare a 1.5 percent State Aid reduction with recent requests from Kansas colleges for increases in tuition up to 8 percent next year, even with inflation below 2 percent.

    But the template never changes: Demands for more spending are always “modest and necessary”; reduced spending is always “drastic and draconian” — regardless of the amounts or how the money is used.

    The legislature did not set out to reduce funding. We simply had questions.

    Why so many unfilled FTE positions perpetually placed on the books with money systematically diverted for other uses?

    Even factoring for inflation, why has tuition gone up so much without a correlation to past increases in state funding?

    When defaulted on, students’ government-backed loans are paid for, ultimately, by taxpayers, so shouldn’t improved graduation and employment rates be prioritized over even higher salaries to the already-highly-paid?

    By the way, the salary cap we requested was not a cut. You will hear it referred to as a cut, even though salaries were held level and not reduced.

    I serve as a commissioner with the Midwest Higher Education Compact — a 12-state network of universities. Last week I attended a commissioner’s meeting in Indiana where we heard from current and former chancellors about the future of higher education. Similar to other sectors — healthcare, for example — there are two very different driving forces promoting two very different paths: collective institution-oriented versus individual outcomes-oriented.

    College students, many unemployed and underemployed, are buried in debt while universities appear more focused on impressing their peers and expanding their infrastructure.

    Indiana colleges, among others around the country, are addressing this disconnect. Indiana University-East, just one example, increased its student numbers and graduation rates while decreasing cost-per-student over 20 percent.

    Kansas state-funded colleges have been raising tuition at astronomical rates, but under the radar. The only difference this year is they are vocal about increasing tuition using the legislature’s 1.5 percent budget reduction as a scapegoat.

    Early in the session, following a discussion about spending and outcomes, KU’s response was to threaten closure of some of Kansas’ most viable institutions: KU’s medical campuses in Wichita and Salina. It was a classic bully move. Rather than address legitimate financial questions, they made threats to cut something highly valued by all. Think White House tour closures.

    In response, the House and Senate conference committees added a proviso to the budget to prevent those closures from happening, even though insiders understood KU’s intention was to stir up angst among constituents in order to intimidate legislators so they would stop asking questions and hand over the money. Think shakedown.

    When the endgame shifts to quantifiable student outcomes — retention and graduation rates, realistic employment tracks, greater efficiencies, reduced costs, lower tuition — collaborative conversations can take place and real-world results can be achieved in Kansas. I remain hopeful and open to such a dialogue.

  • Kansas school standards and other states

    Do those who call for more Kansas school spending defend the standards Kansas applies to these schools?

    Row of lockers in school hallway

    As Kansas attempts to position its economy for growth by reducing taxes, we’re told that Kansas risks letting its public schools decay. Consider the editorial Legislators, Brownback renege on promises to get done with session in the Hutchinson News: “And so Kansas continues down a path to fulfill Brownback’s vision of a no-income-tax state. Meanwhile, we also will accept mediocre public schools and universities and inadequate services to disadvantaged Kansans who at the same time will shoulder more of the tax burden.”

    This is typical of the defense of Kansas school spending: Kansas schools have been doing a good job compared to other states, and under difficult circumstances because we don’t spend near enough. We must spend more, we are told by the school spending interests, and soon the Kansas Supreme Court may add its voice.

    But before we decide to invest more in our state’s public schools, shouldn’t we learn whether Kansas has been holding its schools to high standards?

    Kansas school standards

    NAEP scale equivalents of state grade 4 reading standards for proficient performance, by state: 2009

    When talking about the quality of Kansas schools, the first thing to realize is that Kansas has set low standards for its schools, compared to other states. The nearby illustration (click for larger version) maps state test scores onto the National Assessment of Education Progress, a test that is the same in all states. Fourth grade reading is presented in this illustration. States on the right side of the chart have higher standards than those to their left. Note where Kansas appears: Only seven states appear to its left, meaning that Kansas has very low standards for fourth grade reading.

    In other subject areas and other grades, Kansas appears a little further to the right. But in no case does Kansas appear above the midpoint.

    Despite these facts, last year Kansas school superintendents claimed in an editorial that “Historically, our state has had high-performing schools, which make Kansas a great place to live, raise a family and run a business.” Most newspaper editorial writers believe that without looking at the actual situation. See Despite superintendents’ claim, Kansas schools have low standards for more on this topic.

    National test scores

    It’s often expressed that Kansas ranks well on the National Assessment of Education Progress, a test that is the same in all states. Kansas school administrators take pride in mentioning this.

    Consider fourth grading reading, an important benchmark. Kansas ranks 17th among the states, with eight performing significantly better than Kansas, and 21 with no significant difference from Kansas. If you stopped looking at this point, you might conclude, as do most Kansas newspaper editorial writers, that Kansas has good schools.

    But consider white students alone. In this case, Kansas ranks 25th among the states, with 11 performing significantly better than Kansas, and 24 not significantly different.

    If we look at black students alone, Kansas ranks 26th among the states, with six performing significantly better than Kansas, and 37 not significantly different.

    Considering Hispanic students alone, Kansas ranks 17th among the states, with six performing significantly better than Kansas, and 34 not significantly different.

    Because different ethnic groups tend to perform at different levels on the NAEP test, and because states have different mixes of ethnic groups, aggregated statistics can hide an important underlying story. In this case, we see that Kansas schools don’t rank as high as naive supporters believe.

    Kansas and National NAEP Scores, 2011, by Ethnicity and Race

    For another look at how aggregated data can mask important stories, see Kansas school test scores, in perspective, were the statistics show that Kansas students score better than Texas students, as most Kansans probably believe. But, Texas white students score better than Kansas white students, Texas black students score better than Kansas black students, and Texas Hispanic students score better than or tie Kansas Hispanic students. The same pattern holds true for other ethnic subgroups.

  • Kansas taxes, the debate

    Seal of the State of KansasKansans are not being helped by their stable of newspaper editorial boards. We’ve seen this before (Kansas editorial writers aren’t helping), and the conclusion of the legislative session provides more examples.

    An example is the editorial Why are these Kansas politicians celebrating? in the Kansas City Star. A quote is this: “Lawmakers had to go into overtime in the 2013 session trying to figure out how to climb out of the ditch they created last year when they gave away $3.7 billion in income tax cuts without figuring out how to offset them.”

    This quotation serves to illustrate much of what’s wrong with Kansas newspaper editorial writing, and also with a large group of Kansas politicians.

    A first problem is ideological. When you read words like they gave away income tax cuts, you know the writer believes that a certain portion of your income belongs not to you, but to the state. If the portion going to the state is reduced, the state is giving away something. What the state is giving away must be offset or paid for in some way, according to this ideology.

    Private sector job growth, Kansas and selected states

    A second problem is the presumption that the Kansas economy has been humming along smoothly, and that efforts to reduce taxes (and therefore government spending) are a change for the worse — the “ditch” that the Star referred to. But I would ask anyone who believes Kansas has been doing well to acquaint themselves with the facts about our economy. An example is the nearby chart (click for larger version) of private sector job growth in Kansas and surrounding states for the past two decades. For most of this period Kansas government has been in the hands of “moderates,” both Republican and Democratic. How would you say cumulative job growth in Kansas compares to our peer states?

    Anyone who defends the recent decades of moderation must confront this and similar statistics. If private sector job growth doesn’t convince you, how about personal income growth? An interactive visualization of data from the U.S. Bureau of Economic Analysis is here. The pre-configured view shows income in Kansas growing slower than our peer states, the Plains states, and the United States.

    If people are not aware of the dismal performance of the Kansas economy, ask them why they don’t know the facts. If they know the facts, ask them why they defend the status quo. Ask them why they want to deny Kansans the level of economic opportunity that people in, say, Oklahoma have.

    But, editorial writers would rather complain about what the legislature did to “pay for Brownback’s perilous tax experiment.” (H. Edward Flentje : Is Kansas on the right track? Wichita Eagle)

    Echoing the sentiment of the left-wing editorial boards, Flentje, a professor at Wichita State University with much practical experience in state and local government, also wrote that the legislature had to “clean up the mess” created by last year’s “financial debacle,” that being the income tax cuts. He also used the “pay for” line of thinking — several times for good measure — as well as tossing in “perilous tax experiment.” (I think I mentioned that earlier, but it bears repeating.)

    This left-wing ideology is the prevailing breeze that propels Kansas newspaper editorial boards, along with others like Flentje who ought to know better. For those who disagree, I ask them to defend the record of the Kansas economy under the leadership of coalition of moderate Republicans and Democrats. (For more background, see Kansas traditional Republicans: The record.)

    While it’s good that Kansas reduced income tax rates, it’s bad that on the balance, more tax revenue will flow to Topeka. In particular, raising the sales tax (or preventing its reduction, whichever you prefer) was a bad move, and particularly the sales tax on food. Writing in the Wichita Eagle, Kansas Senate President Susan Wagle wrote that Kansas has moved towards more of a “FairTax” model Susan Wagle : Kansas is on the path to prosperity. That’s true in some respects. But an important part of the FairTax model is the “prebate.” This is a monthly advance refund of sales tax on necessities up to the poverty level. Its purpose is to mitigate the regressive nature of consumption, or sales, taxes.

    Kansas, however, taxes the sale of food. Furthermore, on July 1 the sales tax on food will be higher than it would be under current law. The new tax law restores a portion of the food sales tax credit program, but this is a clunky measure that will benefit very few people.

    The biggest failure of the Kansas legislature this year was that little or nothing was done to reduce spending. In 2011 three bills passed the House that would take a long-term approach to reducing the cost of Kansas government. None of these bills were considered this year. (See In Kansas, there are ways to reduce the cost of government.)

    Kansas Policy Institute has also prepared ways that Kansas can save money. See Kansas can cut spending, if we want.

    Cutting government spending is important if we want to grow Kansas. See States that Spend Less, Tax Less — and Grow More and To boost jobs and prosperity, Kansas should cut spending.

  • Kansas tax changes

    TaxWhat are the changes to Kansas tax law that have been passed by the legislature and await the governor’s signature?

    The nearby table presents estimated changes in tax revenue based on changes to the law that was current at the time of the estimate. (The source is Kansas Legislative Research Department.) The largest factor in that law was that if the legislature did nothing, the sales tax rate would change from 6.3 percent to 5.7 percent on July 1, 2013. The legislature decided to change the rate to 6.15 percent on July 1. The estimated increase in revenue is estimated to be $193.2 million in fiscal year 2014, and $1,118.5 million total over the next five years.

    Kansas tax changes, June 2013

    Other changes to the law presented along with the estimated change in revenue.

    The most important number to notice is the five-year total: $777.1 million. This is the additional tax revenue that Kansas is expected to collect based on the action of the legislature this year. For the year starting July 1, the number is $307.9 million, which is 40 percent of the five-year total.

    Someone asked me whether the tax bill increases taxes on the middle class. It’s hard to answer that question, as several changes were made. Here’s what each change means:

    Sales tax: On July the sales tax rate will be less than it has been for the last three years, but more than if the legislature had done nothing. Whether this counts as a tax increase or not is solely in the eye of the beholder. The new tax law, as the chart shows, brings in more sales tax revenue than the law we’ve been living under, so I think that’s a tax increase.

    Sales taxes are commonly thought of as regressive, meaning the burden falls disproportionally on the poor or low income. To help with this, the legislature partially restored the food sales tax credit program. This is estimated to refund a little more than $20 million to low-income Kansans to compensate for the sales tax on food.

    The mechanism of the food sales tax credit is clunky. One has to file an income tax return to receive it. Further, the credit is now non-refundable, meaning that it can only be used to offset an income tax liability. In tax year 2010, when it was refundable, this credit was worth $59 million to Kansans, but is estimated to provide only $20 million in relief next year.

    Itemized deductions: Except for charitable deductions, the value of itemized deductions is being reduced. It’s called a “haircut,” and the amount is 30 percent next year, and increasing after that.

    For example, if a taxpayer has a deduction of $1,000, the value of that deduction is either $30 or $49, depending on whether the taxpayer is in the 3.0 percent or 4.9 percent marginal tax brackets. After the haircut, the deduction is reduced to $700, meaning the value of that deduction is either $21 or $34.30. This change to the law is estimated to bring in an additional $114.6 million next year, and $663.8 million over five years.

    Not everyone itemizes deductions. At the federal level, only about 30 percent of returns use itemized deductions. So for 70 percent of filers, the value of the standard deduction is greater than their itemized deductions. For these, this tax law change has no impact.

    Standard deduction: Most taxpayers use the standard deduction. Last year, Kansas increased the amount of this deduction, meaning that everyone paid less tax. Currently, it is set at $9,000. The new lax law changes that to $7,500 for married taxpayers filing jointly and to $5,500 for single heads-of-household. This means taxes will rise for most people. A family will pay tax on an additional $1,500 of income, which is an extra $45 or $103.50 in taxes. This change is estimated to raise an additional $56.3 million next year, and $311.1 million over five years.

    Tax rate reduction: The new tax bill reduces tax rates. For tax year 2013, the two marginal income tax rates are 3.0 percent and 4.9 percent. The law calls for these to be reduced slowly over the next five years. This change in tax law is estimated reduce revenue by $35.2 million next year, and by $1,195.5 million over five years.

    Rural Opportunity Zones: This program provides income tax relief to those who move to eligible counties. Its expansion is estimated to reduce tax revenue by $10.3 million over five years.

    Food sales tax rebate: As explained above, this program is expected to reduce revenue to the state by $110.5 million over five years.

    So whose taxes went up, and whose went down? The law changes several provisions, and in different directions. None of the changes are particularly large in magnitude, unless you spend a lot or earn a lot. Most people will be paying a different mix of taxes, which will influence their behavior.

    The bottom line, though is this: Tax revenue flowing to the state of Kansas is rising.

  • Ashby, Howell recap legislature

    Kansas Legislature

    Today on the Joseph Ashby Show, the host and Kansas State Representative Jim Howell reviewed the 2013 session of the Kansas Legislature.

    [powerpress url=”http://wichitaliberty.org/audio/joseph-ashby-show-2013-06-04-excerpt-jim-howell.mp3″]Joseph Ashby Show, June 4, 2013 (excerpt).

  • AFP-Kansas statement on 2013 legislative session

    Americans for Prosperity-Kansas remarks on the completion of the 2013 session of the Kansas Legislature.

    Americans for Prosperity

    TOPEKA, KAN. — The Kansas chapter of the grassroots group Americans for Prosperity released the following statement in response to the close of the 2013 Legislative Session:

    “In the last few years, legislators have made great strides to bring the state of Kansas on a path toward fiscal responsibility,” said AFP-Kansas state director Jeff Glendening. “The budget for the next fiscal year included a slight reduction in spending that certainly was a step in the right direction, but there is still work to be done in reducing the size and scope of our state government. The budget provision that limits the growth of state spending to 2 percent per year is an important step to keep spending under control.

    “With regard to the statewide sales tax rate, however, it is unfortunate that legislators chose to impose a higher sales tax rate on Kansans. While the Legislature showed respect for taxpayers by lowering the overly burdensome sales tax rate, it was only a partial victory for Kansans’ pocketbooks because the rate did not return to the previously promised level of 5.7 percent.

    “Additionally, we applaud work by legislators to make Medicaid expansion under ObamaCare more difficult to implement in Kansas. The passage of the proviso requiring legislative approval on any Medicaid expansion the Governor would wish to put in place simply adds a necessary layer of protection from the further expansion of ObamaCare.

    “It’s disappointing that legislators failed to defund Common Core, with so many Kansans expressing serious concerns with these federal standards. We look forward to legislators re-addressing this issue when they return to Topeka in 2014.

    “In the last weeks of the session, hundreds of Americans for Prosperity-Kansas activists sent emails to their elected officials. We applaud those legislators who listened to their constituents, and we send our sincere thanks to the citizens who spoke up throughout the session on overspending, paycheck protection, judicial selection reform and Medicaid expansion. Their efforts were instrumental in leading to legislative victories in these key areas.”

    Original is here.