Late last Thursday afternoon, while most Kansans were checking to make sure they had sun block for the 4th of July weekend—and us balding folk were making sure we had a hat to wear so our scalps won’t sunburn, Kansas received an important bunch of numbers.
It’s the last monthly report of tax receipts for the state this fiscal year.
Remember the talk in the Legislature last year, that a penny sales tax increase (to 6.3 percent from 5.3 percent) until July 1, 2013, was going to shut down the state, that Kansans wouldn’t buy things anymore and the roads would be clogged with Kansans going out of state to buy their groceries?
Well, with 11 months of the state’s July 1, 2010, to Thursday fiscal year in the books, the first year sales tax has netted Kansas $1.798 billion. That’s $280 million more than the state received in the same time period a year ago, before the sales tax was put into the law books.
Want to know the interesting part of that sizable increase in revenues from your spending? That $280 million in new sales tax receipts is about an 18.5 percent increase…pretty good. But, if you pencil it out, the penny sales tax increase upped the rate by 18.8 percent.
Best guess is that the sales tax increase didn’t badly damage—or even nick—the amount of money that Kansans spent buying things at retail this year. Not quite the catastrophe that we were all told to expect from the largest tax increase in state history, was it?
Now, there’s no way to know whether Kansans would have bought more sales-taxable items if the penny sales tax hadn’t been in place. But you don’t hear about people who went out of state to buy a refrigerator to save $6 or $8 on sales tax, do you?
We apparently had a tax increase that made virtually no change in the daily lives of Kansans who buy things at their local stores.
Now—or at least when we get the final fiscal year receipts for the year and start perusing them—it appears the state is going to have some ending balance to spend next session, either on providing services…or tax cuts.
Next year, yes, an election year, does the Legislature repeal the State General Fund part of the sales tax (that’s .6 percent, .4 percent is supposed to be permanent and goes to the highway fund) two years early…possibilities are:
• Keep the SGF part? That might allow the Legislature to put money back into government services it has cut in the past couple years to make the budget balance—thanks to the sales tax.
• Or repeal that .6 percent sales tax next session? Perhaps…but is there much election-year political hay to be made by repealing early a tax that most of us apparently don’t much notice?
• Or, is there something sexier that will look good on a campaign brochure…like a cut in Kansas income tax? Or, say, a sales tax exemption for sun block and maybe for hats for the balding…
Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver’s Capitol Report—to learn more about this statewide nonpartisan political news service, visit the website at www.hawvernews.com.
Keep or repeal last year’s sales tax increase?