Written by Bob Brookens Tuesday, 05 May 2009 13:56
We just finished what was to have been the one and only week of the wrap-up session. I predict we’ll wind it up, perhaps in the wee hours of Mother’s Day Sunday; I hope not that late.
We have no budget reconciliation bill, and we need one. The revenue estimates are low—way low.
Last week Gov. Sebelius was appointed U.S. Secretary of Health and Human Services. That led to Mark Parkinson being sworn in as our new governor. One of the week’s highlights was Parkinson’s address to the joint session of the House and Senate on Thursday. I suggest you find his speech online and watch it, or write me. I can send you a copy.
If you get a phone call card saying I want to raise taxes, please remember that’s not true. I oppose continuing cuts of the franchise tax from its already-reduced rate while in a budget crisis.
Also, I will be one of the first to say that businesses’ real property tax is way out of line; failing to pay the slider (explained below) would have caused higher real estate tax rates on business property and homes, so my advocacy of the franchise tax allows the slider to be paid, thus holding down real estate taxes in Marion, Chase and Butler counties.
Here’s how we got into this predicament:
On Thursday, House members reviewed the Appropriations Committee’s budget. Being a budget, it has no revenue/tax matters in it; that is left to a separate bill, which could include tax increases (there are none), tax cuts, and what we love to call “revenue enhancements.”
Those are not tax increases in the sense that income, sales or property tax has a rate increase, but they affect tax collections by changing a current practice, such as delaying a tax cut that is going into effect, or taking someone else’s money (also called a “fee sweep”).
I had been informed the Tax Committee would meet early this week to look at revenue; to date it has not held one meeting. Instead, at a press conference at the Kansas Chamber office it was announced, effectively, that the budget would be reconciled without additional revenue, solely with tax cuts.
That sounds great—the problem is: We are in a major recession and shrinking government that much means firing workers when there are no other jobs available; don’t help physically or developmentally disabled people; stop services to the aging; stop road repair; don’t pay local government revenue sharing; and a host of other things.
To make the necessary additional cuts, Appropriations then added a 5 percent pay reduction for fiscal year 2010 for all state workers—janitors, secretaries, the governor, the Supreme Court, legislators and all other state employees.
While 5 percent is tough if you have a $70,000 salary and a house payment, try feeding a family on $25,000, then reduce that by $1,250. We already pay our state workers less than most states.
More importantly, we were asked to cut workers’ pay just after the announcement at the Kansas Chamber office that there would be no revenue increases; translated, that meant while cutting state workers’ already low salaries, we would not be delaying either the tax cuts to the corporate franchise tax, or the tax rate cuts on corporate income taxes.
On another “revenue” issue, the 2005 or 2006 legislature abolished, over time, property tax on machinery and equipment and also promised local governments to “slide” state money to them to make up the loss of those tax receipts.
After I worked so hard in the 2009 rescission bill to assure those “slider” payments would be sent to our counties and cities, I saw in this 2010 Appropriations bill that I was expected to vote in favor of cutting out any slider payments to local governments, forcing your property taxes to go up.
You now know why we defeated the House budget proposal; there are other issues, but those are the biggies. FYI: The franchise tax is paid by corporations with more than $1 million in assets and is paid both by companies located in Kansas and those not located here but doing business here.
You may e-mail me at Brookens70@sbcglobal.net, or write me at either 201 Meadow Lane, Marion, KS 66861 or at Kansas State Capitol Building, 300 SW 10th, Topeka, KS 66612. If you are coming to Topeka, call me at: 785-296-7636.