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Kansas governor proposes taxes, smoking ban, green energy projects

Kansas Governor Mark Parkinson‘s State of the State address Monday proposed two new taxes, a comprehensive statewide smoking ban, and a cabinet team to promote green energy projects. He didn’t propose closing tax exemptions, and he made no mention of an available method that could help Kansas make it through a fiscal shortfall.

The complete text of the governor’s address, as prepared for delivery, is available at Protecting What We Have, Building for the Future.

What’s missing from the governor’s address is recognition that the state is sitting on hundreds of millions of unused cash that could be tapped to get the state through a tough spot. The Kansas Policy Institute has performed research and analysis that indicates that by spending down these fund balances, Kansas schools and agencies could continue delivering services without requiring a tax increase.

In his response to the governor, which was recorded before the governor spoke, Speaker of the House Mike O’Neil opposed tax increases. He didn’t mention the fund balances.

Instead of making use of an untapped resource, the governor proposed tax increases. In particular, the governor proposed taxes that fall hardest on poor and low income people.

His proposed cigarette tax falls hardest on low-income people, as they smoke proportionally more than high-income people, and spend proportionally more of their income on cigarettes.

The increase in sales tax again falls most harshly on low income people, as they spend nearly all their income. Wealthier people may save a lot of their income, and saving isn’t subject to sales taxes, at least not for now. Purchasers of stocks and bonds don’t pay sales tax.

Although the sales tax is proposed to last just three years (the bulk of it, anyway; two-tenths of a cent is proposed as a permanent tax to fund a highway plan), there is a definite risk that these taxes become permanent. The Intrust Bank Arena, which just opened in downtown Wichita, was funded by a temporary sales tax. That tax ended as scheduled, but there were those — including at least one officeholder — who wanted the tax to continue.

At the same time the governor proposes to raise money through increased taxation of cigarettes, he also proposes a comprehensive statewide smoking ban. This is at cross purposes. Does the governor want people to smoke or not?

It will also be interesting to see how comprehensive any proposed smoking ban legislation will be. The ban proposed last year exempted state-owned casinos like the one that recently opened in Dodge City.

The governor didn’t address eliminating the many tax exemptions, which the Secretary of Revenue is promoting as a way to raise perhaps $200 million per year in revenue.

The governor didn’t mention Schools for Fair Funding’s decision to sue the state for more school spending.

In his address, O’Neil said that Kansas families and businesses are struggling and making sacrifices.

While tax revenue to the state has fallen, demand for government spending has continued. Raising taxes now near the end of a recession, he said, is short-sighted and counterproductive. It is not prudent to raise taxes. “Raising taxes now in the middle of a severe recession would mean losing tax-paying businesses that are already struggling to survive.” Loss of these businesses and their employees would make the fiscal situation worse, he said.

This applies to either new taxes or to the elimination of tax incentives. Either would harm growth and reduce capital that businesses need. “Simply put: Kansas businesses can’t pay more unless they make more.” While a tax hike may be attractive in the sort term, increasing taxes is harmful in the long run.

O’Neil said it’s a false choice to either allow business to keep its money or fund government’s obligations. Business must be strong if government is to be fiscally sound. If business grows and prospers, the state’s fiscal situation will improve.

O’Neil said the 2010 legislature will thoroughly examine all spending to make sure that government is operating efficiently, and is spending only on those things necessary to fulfill the legitimate role of government.

He supported a budget stabilization process — by constitutional amendment if necessary. He said we should work towards using zero-based budgeting. More audits are needed, and he reminded us that Kansas used to have a state auditor.

On education funding, O’Neil said that when all sources of funding are considered, schools have been cut less than 1.5% on average, and schools are receiving more funding than in fiscal year 2008. The school funding lawsuit is irresponsible, he said. K through 12 education cuts have not been as severe as cuts to other state agencies.

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4 Comments

  1. harleyrider1978 January 12, 2010

    Note that the EPA report of 1992 on second hand smoke was tossed out as junk science by federal judge osteen.
    Followed by 2 congressional comittees with henry waxman in attendance,both comittees also tossed the epa report as junk science………yet these same smoke free and govmnt health groups continue to make claims shs/ets harms people. Sg general carmona was asked to provide some names of the dead he claimed of 50,000 deaths to shs a year……..yet he couldnt name one and he declared the number was computer generated on the sammac system……….to this date there still are no names………note this too the relative risk factor of second hand smoke is a 1.1 while tap waters is a 1.24 and milks is a 2.4 yet we dont call these things carcinogens as the epa study of 1992 tried to claim…….then when we find not one smoke free group lists the true major component in second hand smoke is water vapor and air at nearly 94%…..surgeon general report of 1989 pg 80.

    Then we have OSHA not making a rule of limits………..why because nano grams and femptograms are going to harm anyone………what we have here is a lie and mass propaganda by health officials andnon-profits out to secure profits for big pharma elling the cessation drugs….the guilty parties are the robert woods johnson foundation aka johnson and johnson along with the american cancer society ,hired out by RWJF to lobby for smoking bans…….note also that all state wide bans include tax dollars for smoke free droups and 300-500 million dollars for purchasing and paying for quit lines and buy cessation drugs from big pharma…………This story is bigger than the global arming hype from the climategate emails………..follow the money and you will find the world health orginization is heavily financed by big pharma and lets not forget the world anti-tobacco treaty where countries were blackmaled to sign the treaty or lose world bank loans………….Even the tobacco companies had there hands tied by the MSA deal to stay shut up about anything tobacco control may say in the future……….leaving tobacco control prohibitionists the ability to make any claim they so desired and see it rubber stamped by government agencies staffed with people from the same non-profit groups…look at obamas hhs secretary or the cdc director all from tobacco control back grounds even the new surgeon general comes from tobacco control in mississippi…………….colusion you bet.

  2. Larry Notes January 14, 2010

    Just like in West Virginia, dreams never die, they are killed by people like Nick Rahall R-D WV.

  3. Sheila January 18, 2010

    As a small business owner of 29 years, I am begging for the help of people who respect liberty, and the right to run your business, to help tiny tavern owners, pool hall owners, and Veteran’s Clubs, fight back against a statewide smoking ban. Many of us have been in business for decades. We serve, and hire ONLY people over the age of 21. We desparately need your help NOW. Since we have no money for lobbyists and ads in the media, and money to grease the politicos, ALL we have is many small voices asking for justice and truth. Businesses are CLOSING in Salina, and Emporia RIGHT NOW. These are tax paying, property owning citizens. The businesses that fought for the exemptions in Wichita are now in jeopardy. PLEASE email or call local Reps and let them know, that adults are NOT forced into neighborhood taverns, and NO ONE is promoting smoking around children. The money for this pro ban agenda comes from the pharma companies that sell nicotone replacement products. THe grant sponges, both in private, supposed non profit, foundations, and employees of the County and State, are all getting this pharma money to lobby for smoking bans. Small business owners cannot buy full page ads or buy off Reps. We PAY taxes, unlike the pro ban people, who suck up grants, like Hoover vacuums, and take money from tax payers for this agenda.

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