Taxes and budget
The two legislators fielded a variety of questions, but several had to do with Gov. Sam Brownback’s plan to eliminate the state income tax, and the possible consequences of that move.
Schroeder said number crunchers in Topeka are projecting the state will fall $267 million short in revenue for the 2014 budget.
“Either we need more revenues coming in or we cut additional budgets,” Schroeder said. “The word is, no more revenues will be coming in.”
Schroeder and Emler agreed that additional budget cuts would hurt existing programs, and ultimately the state.
Emler highlighted the state corrections budget as one example.
“We were doing a great job stopping recidivism for awhile, but in the recession we had to cut the programs that were helping to keep people from returning to prison—teaching them to become carpenters, or take care of their drug problems while they were still in prison.
“We can’t do those things anymore.”
Both men said they did not share the governor’s proposition that eliminating the state income tax would bring more businesses and jobs to Kansas.
Schroeder said most businesses look at a state’s total tax package—which usually includes income, sales and property taxes.
Emler said elimination of the income tax will require higher property taxes to pay for state and local services. He said surveys indicate that 42-47 percent of people are most concerned about property tax, around 30 percent are concerned about sales tax and only 17 percent are concerned about income tax.
One reason property tax heads the list, both men said, is that people don’t have to pay income taxes if they aren’t generating income, but property taxes are required whether they are earning income or not.
Both men said they favored the “three-legged-stool” approach to raising state revenues, which means combining all three approaches at the lowest possible rates.
“Our income tax is low enough that it will not be a driver for business, in my opining,” Emler said. “If we have high property taxes, that’s going to be a disincentive to bring business to town.”
Hillsboro Mayor Delores Dalke said she supports the governor in general, but questioned the direction he was taking the state on the issue of tax revenue.
“It seems like he is pushing us on the local level to increase property taxes, which makes people unhappy,” she said.
“I’m in the real estate business, and I have people, when they come to town, say, ‘Oh my, your (property) taxes are high.’ Well, we’ve got the lowest taxes in Marion County, but they say it’s just too much.
“Consequently, we’ve got to do something other than push everything to property tax.”
Dalke also spoke against the governor’s proposal to eliminate the mortgage-interest deduction and the property-tax deduction.
“I know there’s a push for both of those, but please don’t let that happen,” she said.
One participant asked the legislators if they were skeptical about the budget numbers the governor’s office has been using to promote its tax and budget initiatives.
“Yes, I’ve come across a lot of people who are very skeptical about the numbers,” Schroeder said. “I haven’t dug into it, but some incorrect numbers were used.”
Emler said, “Because of the way the last election went (with an increase of Tea Party Republicans), there was pretty broad support for the governor’s numbers and his policies. Having sat on the Budget Committee for as long as I did, when I heard those numbers, frankly I wasn’t sure they were right.
“And it turned out they weren’t right,” he added. “But I can’t say the governor is intentionally misleading us.”
Emler criticized the state’s budget director for blaming the error on staff members instead of accepting responsibility himself.
“Frankly, if I was the governor I would have been more stern with the budget director,” he said.
Other topics that surfaced during the 1 hour, 20 minute gathering included the pros and cons of subsidizing renewable energy production with public dollars, pending changes in corporate-farm law, and the initiative to prevent tax dollars from being used to lobby legislators.
Emler challenged the logic of that last initiative.
“Frankly, there are 250 bills in the Senate right now, almost 400 in the House, so they’re talking about over 600 bills,” he said. “There’s no way in the world that anyone can have that many bills memorized. We have to have people who can come to us and make us aware of these bills and what that bill does (to their area of interest).”