Tax hike options sought

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March 8, 2010 - 12:00 AM

Saturday’s legislative forum of more than two hours, sponsored by the Allen County Farm Bureau, included several questions from the 40 people who attended.
Among them:
Options to a tax increase. Sen. Derek Schmidt said February’s revenue figures, another $71 million tax income shortfall, “has shaken up my colleagues” to the point “we’re going to have to start voting, not sit around and chew the fat.”
A 1-cent increase in the sales tax is out, he said, noting most Republicans were opposed philosophically and “the economy folks think a big sales tax increase would interrupt the state’s revenue flow, particularly along state lines.”
There are no good answers, Schmidt said. “Everything is on the table, including looking at some of the state’s hard assets that we could liquidate.”
Rep. Bill Otto agreed with Schmidt’s assessment, and reiterated that many House Republicans had signed a no-tax pledge.
Death penalty. Schmidt said an effort to repeal the Kansas death penalty, in effect since 1994 and with 10 inmates awaiting execution, was defeated on a 20-20 vote in the Senate. “I voted to keep it in place,” he said. “I think it is an effective tool.”
Freeze on hiring state employees. Schmidt said he thought it was better to let agency managers decide what they needed, within framework of budget limitations.
Church taxes. “Not going to happen,” said Otto. “No one (in the Legislature) is vaguely interested.” He added a misrepresentation of the issue was that it would have affected property taxes, rather proposed removal of churches’ sales tax exemption.
Elimination of sales tax exemptions. That is a challenge, Schmidt said, because “the ones we can get agreement on don’t amount to much money.” He cited a sales tax exemption given the Rotary Club of Shawnee, elimination of which would mean next to nothing. However, exemptions will be a topic this week, Schmidt said.
School finance. Part of the problem is money flowing to districts with strings attached, being put in “silos” where it can’t be touched but for one purpose, Schmidt said. He noted state aid matches for construction projects, which, if there were any excess, could not be used for anything else. He observed how special education money flowed through districts’ general fund budgets with none available for local general operations, as well as money for specific groups of students, such as those considered at-risk because of family economic conditions.
KPERS solvency. Schmidt said the Kansas Public Employees Retirement System was skating on thin ice and that the fund eventually would require an infusion of money to meet obligations, but “there won’t be any available this year.”

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