On Monday, June 1, the 101st day of the traditional 90 day legislative session, the Senate debated a plan for six hours that would have taken away most sales tax exemptions to plug the $400 million budget hole. The biggest of these exemptions go to non-profits, schools, local government construction, and business inputs like parts and utilities. In the case of schools, it would effectively mean that the state would be taxing itself. It was pushed by Sen. Steve Abrams, Sen. Ty Masterson, and several Johnson County senators. It didn’t matter that the plan would ultimately go down to defeat with only 9 votes-up until that point, 9 votes was the most that any plan could get.
Every year is always different, but this year was by far the strangest. After years and years of representatives and senators getting elected to Topeka by signing no-tax pledges and railing against the Federal government in Washington, DC, it’s no wonder our state’s leaders have lost sight of their local responsibility. For many years, I have heard from a lot of people that we need to cut government. That sounds good and we have done quite a bit of it at the state level since 2009. I was Chair of the Senate budget committee when the state made the largest budget cuts in Kansas history to tighten our belts in the face of the Great Recession. Since then, most budgets have been held close to flat, but every one of them for the last three years has assumed the state would eventually face major deficits, so I have voted against them.
Since our state’s budget situation has changed so much in the past few years, I thought I would share about how it used to work. First, Kansas used to have surpluses when the national economy was growing. Now, because we’re in a budget crisis of our own making-much like Washington, DC-we wait to pass the budget until the end of the year so that we can trade votes. Some legislators are given promises on policy. Others are promised additional funding. This year, due to the massive $400 million deficit, threats of funding cuts to schools, universities, communities colleges, and services for the disabled were the vice grips of choice.
In the last few years, those in charge of the budget have not been able to find enough budget cuts to pay for the 2012 income tax rate cuts and business income tax exemption, and all Kansans have now borne two general sales tax increases to pay for it. Some taxpayers have only had tax increases because of how the 2012 tax law cut and eliminated many deductions, including business losses. Other taxes raised to pay for 2012 include an additional $0.50 sales tax on cigarettes and a tax increase on Managed Care Organization/HMO health plans. As all of us know, any “tax” on insurance companies ends up being a hidden fee that gets passed on to all of their consumers through higher premiums.
An unrelated issue that was attached to the MCO/HMO tax increase was a measure to allow the Secretary of the Department of Children and Families to increase the new $25 limit on ATM withdrawals for Temporary Assistance to Needy Families (TANF) recipients. The Federal program sends $102 million to Kansas without any state matching funds required. The $25 limitation has raised concerns because most ATMs only allow $20 withdrawals. The average benefit for this program is only a few hundred dollars a month and most of it goes to people’s utilities and rent and other basic necessities. If we force people to get their money in $20 increments with a $2 fee on each withdrawal, it doesn’t necessarily improve accountability, but it quickly makes Kansas’s TANF program into a welfare program for banks. I’m a strong advocate for making sure this money goes where it’s supposed to, but I don’t think “ATM fees” is the answer. Kansas already has one of the tightest welfare programs in the country.
One good thing that came of the long session was that we were able to pass the Scrap Metal Theft Reduction Act. I served on the judicial council last fall to create a bill to decrease this unlawful and costly activity to owners of metal products. It sets up a database similar to what is used in pawn shops to capture stolen items and puts more teeth into the penalty of the crime, including possible jail time. Many farmers, churches, and utility companies have been victims of this crime. The cost in theft and damage to equipment has caused some to lose their insurance policies. I will continue to work to see this destructive crime decreased.
Thank you for all your words of encouragement this past session with your emails and phone calls. If you need assistance dealing with state government, please call me at home (316-772-0147). For other information about the 31st district, updates, and news articles, please go to my website at: www.workingforkansas.com.