Hutchinson News, May 11
Latest bids to burden farmers with more taxes unwarranted:
State Sen. Jeff Melcher, R-Leawood, is at it again, attempting to get more tax money from the agriculture sector to help offset the lingering multimillion-dollar shortfall in the state's budget. For some reason, Melcher doesn't think farmers pay their fair share.
"The folks in the high-populated areas, we have borne the burden of the government," Melcher said, adding that agriculture producers "don't know how easy they've had it."
Really? Obviously, he doesn't understand the unique situation farmers are in or their role in feeding not just Kansas but the world cheaply and efficiently. He also doesn't know what the lingering drought has done to farm income or how a farmer's livelihood can be wiped out with just one hailstorm.
He eyes those vast acres of farmland as the means to plugging the $400 million hole that the Legislature created when it did away with income tax for many businesses and individuals. And, yes, that includes farmers.
But Melcher doesn't realize the difference in taxes on land. His latest get-rich-quick scheme for the Legislature calls for a $3-an-acre excise tax on land, which would generate $150 million. That would cost his urban friends who have an acre of land just $3 more, while it would cost a farmer with 1,000 acres $3,000.
He has already proposed legislation that would change how land is appraised, which targets 46 million acres of farmland that would raise $173 million in property taxes for the state and $717 million for counties, school districts and local communities. It would put on the backs of farmers a 473 percent increase on farmland values.
What he fails to realize is that farmers earn their income off that land. If they don't harvest a crop or harvest a bad one because of drought, hail, various diseases or insects or whatever, they don't have any money to pay those increased taxes. Those are problems urban areas don't have.
Pawnee County farmer Tom Giessel contends just that and also offers an easy solution.
"What I hate is when you start shifting tax on property especially farmland. It creates problems. Farmland doesn't always produce," Giessel said. "They need to reinstate income taxes. Lawmakers need to close this chapter on that great experiment."
Melcher counters that farmers need to "step to the plate." Maybe so, but his approach illustrates that property doesn't generate income, and it's the income tax that makes the most sense for farmers as it does for other businesses and individuals.
If the plethora of tax increases proposed occurs, Melcher and his cohorts might just find their plates are empty.
The Wichita Eagle, May 9
Legislators need to right the tax wrong:
Politics being what they are in Kansas, taxes can be cut with ease and relish but readjusted upward only with extreme difficulty, and perhaps a disproportionate shift of the burden onto those least able to pay.
That's why many state leaders, now forced by an $800 million budget shortfall to look for more revenue, are talking less about revisiting the dramatic reductions to state income taxes passed in 2012 than about raising the statewide sales tax, fuel tax, liquor and tobacco taxes, and even the property tax (by axing the homestead exemption of the first $20,000 of a residential property's value from the statewide levy for schools).
Yet some, including Rep. Mark Hutton, R-Wichita, increasingly seem to understand that too many of those 330,000 "business owners" now exempted from state income taxes are not and never will be job creators, that the exemption isn't attracting employers to Kansas or otherwise boosting economic growth, and that fairness and fiscal responsibility demand a legislative repair job.
As Senate President Susan Wagle, R-Wichita, also has noted, "it's unfair tax treatment" for the state to demand income taxes be paid by an accountant or engineer on a company payroll but not by those in the same field who are self-employed.
Such arguments put these legislators in the unfamiliar position of being at odds with Gov. Sam Brownback and the Kansas Chamber of Commerce and other business groups. The odds are against their approach prevailing as the Legislature tries to pass a balanced two-year state budget and adjourn the session.
But "the individual tax savings are not significant enough to spur employment growth or lure companies to our state, yet it's costing our state over $200 million," Hutton said last week, arguing that the "financial reality of our state and the basic tax policy fairness" require action.
According to the state, just 5.3 percent of the business filers enjoying the exemption represent $171 million of the total $205 million annual revenue hit to the state.
Hutton and Rep. Marvin Kleeb, R-Overland Park, offered a bill under which business owners with at least one full-time employee or the equivalent would pay income taxes at the 2.7 percent rate and those without employees would receive no tax break. The legislation would bring in an estimated $232 million for fiscal 2016 and $176 million for fiscal 2017. It also would restore taxation of rental, royalty and other "passive" income.
Another proposal by Sen. Les Donovan, R-Wichita, would replace the exemption on pass-through business income with a tax credit equal to 1 percent of the business' payroll.
The predictably fierce push-back, led by the Koch-funded business groups, is that the tax cuts need more time, that the real problem is state spending, and that money in Kansans' pockets is always preferable to money in state coffers. But such lobbyists have been hard-pressed to be specific in saying how the state can cut its way back to balance.
And as Donovan noted in frustration last week, as most of the tax-hike proposals went nowhere in his Senate committee: "We're not trying to raise $10,000, you know, for a bake sale. We're trying to get the budget fixed for the state of Kansas."
Praise and encouragement are due the prominent GOP lawmakers seeking to right the wrong of the tax reform, and in the right way.
Lawrence Journal-World, May 8
Open records flaw:
Kansans who support government transparency were disappointed last week by an attorney general's opinion stating that the private email of government officials isn't a public record even if the messages being sent are discussing government business.
The good news, however, is that Attorney General Derek Schmidt also could see there was something wrong with that situation. In response, he proposed legislation on Wednesday to help close the private email loophole in the Kansas Open Records Act.
The issue arose in connection with a message sent through Budget Director Shawn Sullivan's personal email account outlining the governor's budget proposal. The email, which included budget details that hadn't been shared with the public or the Kansas Legislature, was sent to some of the governor's close advisers, including two who now are registered lobbyists. When news organizations sought the release of the message, they were told that private emails don't fall under the open records act and Sullivan had no obligation to release it.
The case drew attention to a huge flaw in the state law. Under Schmidt's interpretation, any amount of serious state business could be discussed and perhaps decided through email communication on non-government accounts.
That is the law, Schmidt said, but the proposal he revealed on Wednesday indicated that he agreed that wasn't the way the law should be.
Schmidt's proposal would establish limits to protect private content in government employees' personal email while also making clear that public employees can't use private email accounts to skirt the requirements of the open records law. Any email used to conduct or transact public business would be considered "pursuant to their official duties," Schmidt said, and therefore would be considered a public record.
Correcting this law is an important step toward protecting open government in Kansas and warrants the immediate attention of state legislators. Congratulations to Schmidt for taking quick action on this issue. Lawmakers should follow his lead and fix the open records loophole before the end of the current session.
Topeka Capital-Journal, May 6
'Veto' is back in veto session:
That period of Kansas' annual legislative session conducted after most of the work was done and legislators had enjoyed a break in their routine once was commonly known as the "veto session."
But the veto in "veto session" seemed to disappear over the years. The days before first adjournment became a time to tie up loose ends or address heavy lifting that had been put off, for one reason or another, until the last minute. And "veto" certainly hasn't been part of the Statehouse lexicon since Gov. Sam Brownback was elected and teamed with a Republican-dominated Legislature to put their stamp on Kansas and state government.
A Legislature thought by most to be in lock step with the governor reared up and overrode his veto of a bill that placed requirements on the ride-sharing company Uber.
At this point, the specifics of the bill and why Brownback vetoed it aren't nearly as significant as the fact legislators overwhelming rejected the governor's position. That veto, as much as anything else that has transpired in the Statehouse this year, indicates the road to a balanced state budget for fiscal year 2016, which begins July 1, could be a very rocky one for Republican legislators and Brownback.
Earlier in the session, many legislators let it be known they weren't pleased with the governor's recommendation they increase taxes significantly on cigarettes and other tobacco products and also increase taxes, although less significantly, on alcohol — all to raise about $210 million.
Neither chamber has passed those tax hikes, and the margin of victory on the veto override indicates legislators might not be opposed to disappointing the governor further.
Republican legislators, who decide what is passed and what isn't, find themselves planning to do something they really don't want to do — raise taxes. Yet they have proposed everything from increasing taxes on farmland to hiking the state's tax on fuel and eliminating some tax deductions for property owners. At each step along the way, they ask the people with sharp pencils how much revenue each move would generate. So far, they aren't even close to the $400 million they need to bring the 2016 budget into balance.
Brownback let it be known at the beginning of the legislative session that he would veto any budget bill that included a rollback in the income tax deductions passed earlier in his tenure.
But legislators now know how to use their override authority.
The remaining days of this legislative session could be interesting ones indeed.