Sen. Pat Apple
Finished with its work, the Kansas Legislature returned for final adjournment, sine die, on May 28.
Adjournment sine die (from the Latin “without day”) means “without assigning a day for a further meeting or hearing”’. The 2011 session will begin Monday, January 10.
The state budget was the most significant item of the session. Managing the state budget during times of declining revenue while attempting to match revenue with expenditures is difficult at best. Kansas is in better financial condition than many states. Our budget gap, the difference between expenditures and revenue, was around 8 percent. This is comparable to Missouri and much less than California or Illinois where their budget gaps are more than 45 percent. State tax revenues were off in April by $65 million.
This shortfall was largely attributed to personal income tax from 2009. Kansas personal income declined in 2009 by 1.75 percent, this was the first time since World War II Kansas personal income declined.
Several other factors that also contributed to the state’s financial challenges are beginning to show signs of improvement. According to data recently released from the Bureau of Labor Statistics , the unemployment rate for Kansas is 6.5 percent, a slight improvement. Employed workers in Kansas increased by 11,100 from April to May. Other signs of improvement include increases in sales tax revenue and payroll withholding revenue. It appears we may have reached the bottom of the recession and hopefully we will begin the climb to recovery.
Through your tax dollars, the state of Kansas provides many important services to the people in our state. The tax policy needed to fund these important programs also must keep our state competitive with surrounding states. The majority of our state’s population lives within a short drive of Missouri or Oklahoma. By most accounts Kansas is considered a medium tax state. We neighbor two low tax states, Missouri and Oklahoma. Here are some comparable tax rates:
• State sales tax: Missouri, 4.225 percent, Kansas 6.3 percent;
• Cigarette tax per pack: Missouri 17 cents, Kansas 79 cents;
• Gasoline tax per gallon: Missouri 17.6 cents, Kansas 25 cents.
Currently Missouri does not have a state sales tax on some grocery items.
As we begin the road to economic recovery, it is important to have tax policies that are competitive with surrounding states. Our economic recovery will be lead by small businesses creating jobs and putting Kansans back to work. While we continue to make our way through this difficult recession, we also must look to the future and keep our eyes on the horizon.
Both short term strategies to weather the storm and strategies with an eye towards the future are important for our economic recovery. While the 1 cent sales tax passed by the legislature does not sound like much on a cup of coffee, it is estimated to generate $314 million per year for the state. This is an 18.8 percent increase in state sales tax. I hope we have not reached the tipping point where many significant purchases will be made out of state.
I voted against the budget because I could not support a tax increase of such magnitude. Many individuals and businesses are struggling to make ends meet. Hopefully we have found the bottom of this recession. However, we know that it will be a long and difficult road to recovery. Some economists believe that recessions are “V” shaped and the length and slope down are mirrored by the length and slope to recovery. If they are correct then we have many months before full recovery.
We Kansans are a hearty bunch. We will weather the storm and see better times. We must pull together and do our best.
It is an honor to serve you in the Kansas Senate. I hope you have a great summer.
Column: Kansas will weather economic challenges
Sen. Pat Apple