Kansans are getting a tax hike, if a bill passed by the Senate makes its way through the House and Governor.
Absolutely no one is cheering – not even the people screaming that we must feed the ever-growing and always hungry Kansas bureaucracy.
Those who wanted to “raise revenue” hoped to do so by rolling back tax cuts on small businesses. Those cuts were implemented two years ago, and officials believed they would lead to more job creation and more growth than actually occurred.
When legislators passed the tax cuts a few years ago, it was apparent the tax cuts should be coupled with budget cuts. That didn’t happen, and many hoped that economic growth would thwart the need to pare back spending.
Now many of the No New Taxes pledge signers have signed on to sales tax increases to fill a $400 million budget hole.
Under the Senate’s plan, adopted by a narrow 21-17 majority, the state sales tax rate will increase to 6.55.
Theoretically, it should be too late to impose a new sales tax. State regulations require that retailers – those who would collect the additional sales taxes – be given at least 30 days’ notice on sales tax changes, and that tax change occur at the beginning of the quarter, or July 1. The deadline to give retailers notice passed more than a week ago, but apparently the rules that bind the Legislature are merely suggestions. Prepare accordingly, retailers.
The Senate’s plan would drop the rate of state sales tax on food to 4.96 percent in 2016, at the same time, eliminating a $15 million food sales tax credit. The proposal would also kill some sales and property tax exemptions and income tax credits by 2019, exactly which credits and exemptions would be determined by a special commission.
This seems like a terrible idea. While we think eliminating credits and exemptions is a reasonable endeavor, binding future legislators to cuts in 2019 is not a best practice. Create the commission to study the problem, but don’t suggest that members of the 2019 Legislature be somehow bound to make whatever changes the commission members may suggest.
Finally, the Senate’s tax plan would increase the cigarette tax by 50 cents a pack and add a tax to e-cigarettes. This provision ought to incense convenience store owners in Johnson County. Everyone within a stone’s throw of Missouri will simply feed their addictions on the other side of the state line. In short, this may actually reduce state revenue, because shoppers who travel to Missouri for cigarettes will likely stay there to eat a meal or make other purchases that would have otherwise occurred in Kansas.
This legislative session became the longest in state history on June 6, and as of June 8, it showed no clear signs of grinding to a halt.
We don’t understand why the Kansas Legislature always waits until the waning days of its supposed 90-day session to address the budget, arguably legislators’ top priority. If we had our way, legislators would be working during these extra days without pay, but that’s not the road they took. Legislators continue to draw a salary while they haggle over issues that should have been addressed up front.
That said, we’d rather legislators take their time and get the budget right. In our minds, that means taking a hatchet to state spending. The Senate’s proposal to fill the budget gap by absconding more money from residents gets everything wrong.
We hope the House sends this one back to the drawing board.