Kansas a state in transition, Gov. Sam Brownback told members of the legislature and special guests during the 2012 State of the State Address Jan. 11.
“This state in transition will look less to what Washington can do for Kansas and more to what we can do for ourselves,” Brownback said.
He listed accomplishments from 2011, Brownback’s first year in office, and outlined plans he said would add jobs and encourage growth in Kansas.
“While there are certainly factors a state cannot control when it comes to its economy, taxes are one area we do control,” he said. “And when it comes to taxes we have the highest in the region.”
He pitched a major overhaul of the state tax code to make it “fairer, flatter and simpler.”
Under the proposal, most small businesses would see their state income taxes eliminated. Individual income tax rates would drop from 6.45 percent to 4.9 percent for the majority of Kansans, while those in the lowest tax bracket would pay 3 percent.
Brownback said his plan would modernize the tax code, lower everyone’s rates as well as eliminate income tax credits, deductions and expemptions.
“I firmly believe these reforms will set the stage for strong economic growth in Kansas, and put more money into the pockets of Kansas families and business,” Brownback said.
Kansas Democrats also proposed lowering the tax burden on Kansans in a way that is “fair and fiscally responsible,” Rep. Paul Davis, minority leader in the Kansas House, said in the Democrats’ response to Brownback’s address.
“If we’re going to have a discussion about tax cuts, Democrats stand strongly on the principle that lowering local property taxes should be the first priority,” Davis said.
Income tax accounts for almost half of the state’s revenue, and Davis said Brownback’s plan would require tweaks to the tax code that would lead to higher sales and property taxes.
“Either that, or many of the public services you rely upon today will disappear,” Davis said.
In his speech, Brownback asked the legislature to limit Kansas’ budget growth to no more than 2 percent each year and to devote all additional revenues to reductions in state taxes.
Democrats, Davis said, would like to direct additional state revenues to school districts.
“We believe that the school funding cuts in recent years have gone way too far. Before new corporate tax breaks are signed into law, excess state revenue should be used to restore funding to our schools first,” Davis said.
The Governor announced a proposal to update the way Kansas public schools are funding last month, and he touched on the topic again during his annual address.
“My plan is straightforward – no district gets less state money. Every district gets more flexibility,” he said.
Ending fiscal year 2013 with the statutorily required 7.5 percent ending balance in the State General Fund is another priority for the Governor. He said the budget he will propose this year provides an ending balance of $465 million, fully funds essential services, while holding expenditures below last year’s levels.
Brownback said his administration will also prioritize making KPERS, Kansas public employees’ pension fund, solvent; improving the state’s Medicaid program; and moving the state’s water policy from a use-it-or-lose-it approach to a more conservation ethic.
“Our season is short,” Brownback said. “The needs are great and people, particularly our children, are depending on us.”