Voice For Liberty

Tag: Kansas state government

Articles about Kansas, its government, and public policy in Kansas.

  • Taxed Out of Business

    From the Junction City Daily Union, March 24, 2005

    By Kay Blanken
    Special to The Daily Union

    Friday evening, many of us in Junction City opened our newspaper to the headline, “Local Alco Closing Its Doors.” The Kansas City Star reported that 20 Alco stores across Kansas were closing their doors. This is a Kansas corporation that began in Abilene.

    I, as a business person, am not surprised. Not just Alco is closing its doors; Kansas has lost many stores and companies in the past four years. Is it bad business practices? I don’t think so. Many of the companies and businesses have been successful for many years. What then is happening? Starting three years ago, the state began raising the fees to Kansas businesses and companies trying to make up for the budget shortfall that our Legislature created by overspending. This overspending came from both Republicans and Democrats. Because the Kansas Constitution forbids ending a year without a balanced budget, legislators had to find a way.

    To balance the budget, the Legislature hit many businesses with fees that do not pertain to their type of business. You paid the fees or you risked forfeiting your business. Many of us have our life’s blood in these businesses. We paid the fees.

    This year we again received a new shock. Businesses pay a franchise fee for the privilege of doing business in Kansas. On Feb. 7, Kansas businesses received notice that the franchise tax would max out at $5,008. This is based on the gross your business does before you pay any expenses. Two weeks later we received notice the maximum would be $20,000 — plus a $55 fee for the secretary of state. Here is the letter we received:

    Dear Business Customer:

    Last spring the Kansas Legislature passed SB 147, which requires businesses to pay a franchise tax (we have always paid a franchise tax) to the Kansas Department of Revenue and a separate franchise fee to the Secretary of State. Both are due the 15th day of the fourth month following the tax year end — e.g. April 15, 2005, for entities with a December 31, 2004, tax year end.

    KANSAS DEPARTMENT OF REVENUE — franchise tax (maximum $20,000.00)

    Business entities that have $100,000.00 net worth or more must pay to the Kansas Department of Revenue a franchise tax of 0.125% of the total net worth. Business entities required to pay the tax will file a return with the Department of Revenue, which must be accompanied by taxpayer’s balance sheet. (I can’t find anyone who does not have to pay.)

    Do not send your franchise fee and annual report to the Department of Revenue. Your business will forfeit if the correct annual report and franchise fee are not received by the Secretary of State on or before your forfeiture.

    The letter goes on to tell us how to file and report. What it does not say is how we are to get the money to pay the franchise fee. Many of us in business are just now coming out of a very long downturn. Many have had to borrow money to keep their doors open, and then many have not made it.

    Now many of you reading this will say, “This don’t affect me.” Sorry, but it does. Do you work for a business or company? If you do, you may not have a job for much longer. Or you may find yourself moving to a state that cares about the business and economic climate. Some of you may be saying, “This is only one tax. What’s the beef?” Wrong.

    Businesses pay corporate income tax, which is 4 percent of net income. In addition, net income in excess of $50,000 is subject to a 3.35 percent surtax. The tax law goes on to say “Kansas corporate income tax is calculated using the apportioned net income and the corporate income tax rate of 4 percent for the first $50,000 and 7.35 percent for excess above $50,000.” Then businesses face insurance tax, 2 percent; intangible property tax, counties can tax up to 2.25 percent on intangible property; personal property tax; inventory tax; state sales tax 5.3 percent; city 1 percent; county 1 percent (at this time); unemployment insurance tax from 0.08 percent to 7.4 percent depending on our rating (our rating is based on the willingness of an employee performing his/her job); worker’s compensation insurance (premiums are calculated per $100 of annual employees wages; wonder why that pay raise didn’t come through?), property tax, 25 percent; Social Security tax, 7.65 percent — and I could go on with other licenses/permits and fees, both local and state. So why did Alco call it quits?

    There are a lot of reasons why businesses cannot make it in today’s climate. Buying power is one. A small business pays more for goods than a large conglomerate. But we all pay the same type of taxes and have the same routine costs.

    With Alco closing, Junction City, Geary County and USD 475 will still receive property taxes, but they will not receive the sales tax revenue Alco generated. And our community will no longer receive Alco’s charitable donations, leaving a lot of good projects to suffer.

    At a town hall meeting on Saturday, a candidate for the local school board asked about school finance. The response from state Rep. Barbara Craft was, “We know we need more funding for schools, and maybe we will have to go to the businesses. Oh, maybe I had better rephrase that.”

    The state’s mission statement is, “Our state is constitutionally restrained from overspending, providing a foundation of fiscal integrity for our business climate.” So what happened to throw the state so far off of its budget? Why are so many businesses closing or going out of state to do business? The last count I had was more than 1,300 businesses over three years, and I have no idea of how many jobs were lost. Why are cities raising the fees for services?

    What affects business also affects you. It’s time we all became concerned and start asking our elected representatives the “why” questions.

    Kay Blanken is a Junction City commissioner and co-owner of B&K Enterprises.

  • Clunker law epealed, surliness not

    I received this message from someone who applied for the refund of overpaid sales tax that many in Kansas paid as part of the “clunker law.” That law attempted to prevent cheating on sales tax by those who self-reported the price they paid for a car. Some people lied and paid less sales tax than they should have. The state started assessing sales taxes based on an assessment system that sometimes overvalued a car. This year the legislature passed a law allowing those who overpaid to seek refunds. A good idea — but sometimes, as this story illustrates, a bit difficult to take advantage of.

    Last July I purchased a automobile from a gentleman in Missouri. It was an old clunker that needed much repair as a school car for my daughter for $500. The car had several mechanical problems, had been wrecked and had hail damage. It was worth $500, no more, no less. Even though it had 210,000+ miles, I thought we could have some fun fixing it up. When I went to get a tag for it, they county office informed me that I would have to pay sales tax on $3,400! After much unsatisfactory explanation from the clerk, her supervisor stated “If I wanted a tag, I would have to pay the money”. Sounds like extortion to me. I, then, had to pay sales taxes on the repairs also.

    Our great legislature has since decided that they over stepped their authority and a rebate is in order. I went out to the Kansas State Government website to read the process of getting my money back. They stated that I need a copy of the receipt that the county gave me when I overpaid the taxes along with one of the following list:

    Copy of the bill of sale.
    Copy of the cancelled check used to purchase the car.
    Copies of both the front and back of the title.

    Sounds easy enough. I went to the county courthouse and stood in line for over an hour, finally having the clerk tell me “we don’t keep any records of the taxes you paid and cannot help you with a copy of the receipt”. She did inform me that the title I needed copies of, was the title from the ORIGINAL owner, which they took from me when I overpaid the taxes, and sent to the State of Kansas.

    When I returned home, I spent a couple of hours digging through all my records and finally found the original receipt for sales taxes overpaid. Since I paid cash (the gentleman from Missouri would not accept a personal check, go figure) and in Missouri, the title IS the bill of sale, I came to the realization, that the State had me in a catch 22. I found a phone number on the trusty web site, and gave the department of vehicle taxes a ring. They acknowledged the problem, but gave me a solution. I could write to the Kansas Department of Motor Vehicle Records (downstairs from them) and request a form from them to request that they send a copy of my original title to me. I could then send the copy of the title back to the Vehicle tax department along with the copy of the county tax receipt to get my money back!?????

    I thought about it for a while and decided to give the Vehicle Tax department another call, just to get it straight. I was up to the second level of supervisor and asked him if he really wanted me to—–

    Send a request for vehicle registration and history to the Motor Vehicle Records Department (downstairs from him).
    They would send me a form.
    I would fill out the form (did I mention the $15 fee) and send it back to the Motor Vehicle Records Department (downstairs).
    They would send me a copy of the original title from the gentleman from Missouri.
    I would send it to the Vehicle tax department along with the copy of the tax overpayment receipt (back upstairs).

    I asked him if the process sounded as ridiculous to him as it did to me. I also asked that if I just sent a copy of my title, maybe he could walk downstairs to the title office and cross check it with the original. He said “I will have to get back to you on that one” an after about a week, I actually receive a call from him on my machine! He indicated that I would indeed have to request the title history from the office downstairs and pay the $15.

  • Senator Ruth Teichman, Republican in Name Only?

    This is an interesting analysis that I received from Karl Peterjohn, Executive Director Kansas Taxpayers Network. What Karl doesn’t mention is that Senator Teichman is a Republican.

    Bob,

    This response is so interesting and the timing is so remarkable that I want to submit it for Wichita Liberty. Sen. Teichman responds to my mid-February email that I sent her opposing SB 58. Shortly thereafter, she voted to APPROVE SB 58 on the floor of the Kansas senate. March 22, 2005 the Kansas house votes for SB 58 in an unamended form so it will go directly to the governor for her signature.

    Today, March 24, I received her response to my February 15 e-mail! The timing of this response provides a fascinating insight into the Kansas legislature in general and Senator Teichman in particular. You might also find it interesting to know that Sen. Teichman’s lifetime KTN fiscal vote rating is only 9.7%, and is now the lowest of the currently serving Kansas senators. Sen. Buhler’s was 3.9% but he was beat last November. Her fiscal vote rating is going to continue to be low as Senator Teichman continues to mistreat taxpayers.

    Karl Peterjohn

    Ruth Teichman wrote:
    Date: Thu, 24 Mar 2005 13:25:50 -0600
    From: “Ruth Teichman”
    To:
    Subject: Re: SB 58 Arena tax bill

    Thank you for your comments. I appreciate your concerns.
    Senator Ruth Teichman

    >>> kpeterjohn 02/15/05 12:58 >>>

    Senators:

    A quick reminder of six reasons why the Kansas Taxpayers Network testified in opposition to SB 58 in senate tax committee earlier this month.

    1) SB 58 makes a bad law, KSA 12-187 worse.

    2) SB 58 adds a retroactive provision to KSA 12-187. KTN is adamant in opposing retroactive provisions to state tax law.

    3) SB 58 treats Kansas citizens as second-class to local units who can ignore state law with impugnity if this law is passed.

    4) One of the reasons that this vote won by a very small margin (52-to-48)city, county, and state tax funded organizations donated over $45,000 for the “Vote Yea” campaign conducted by the arena tax hike proponents. This misuse of tax funds outspent the “Vote No” campaign by better than 2-to-1. This was a gross misuse of tax funds including turnpike and regents spending.

    5) The arena will be a money losing failure if it is built using the current plan. The plan itself projects annual losses in the range of $800,000 a year. I frankly believe the losses will be larger than projected. This would be added to a large number of governmentally financed projects that are losing money in downtown Wichita.

    6) This bill should be amended to extend the requirement in KSA 12-187 requiring voter approval of local sales taxes to be extended to cover local property taxes too.

    We have had some folks ask about SB 58 appearing on Kansas Taxpayers Network’s 2005 vote rating. This will be a vote that is included for the reasons cited above.

  • A better way to pick judges

    Contributed by John Todd and William T. Davitt. I fully agree.

    A recent editorial in The Wichita Eagle discussed how trial court judges in Kansas are selected by either election or appointment. We favor neither method.

    Election of judges invites corruption because attorneys and other special-interest groups contribute money to judges’ election campaigns. It is doubtful whether one voter in 10 could even name two of the 25 judges currently on the court. And if they could name two judges, would they have any idea regarding their job performance? Thus it appears that voters do not make an “informed choice” in the voting booth, and instead select judges based on name recognition, party affiliation or yard-sign count.

    Appointment of judges invites corruption because attorneys and other special interests maneuver their members onto the selection committee that sends the names to the governor, and then they go behind the scenes and tell the governor which one they really want.

    We favor a third way of selecting judges as advocated by Gerry Spence in his book “From Freedom to Slavery.” Mr. Spence favors having our judges drafted from a pool of trial lawyers who would serve on the bench for a “limited calendar of cases” before being returned to their private practices. Every trial lawyer would be required to support the system in the same manner, as citizens are now required to serve as jurors.

    Court dockets would soon clear out, because enough judges could be drafted as were needed to clear the dockets. Mr. Spence states: “If judges were drafted, we would no longer be saddled for life with the political cronies of those in power, or be faced with judges who have received campaign contributions from our opponents. To be sure, we would experience some bad judges. But, Lord knows, we have them now — and often for life! On the other hand, we would benefit from the best minds in the legal business, who under our present system rarely seek the judiciary.”

    Democracy requires full faith that justice will be administered with absolute impartiality. That faith is certainly challenged if we enter a courtroom knowing that our opponent has contributed substantial money to our trial judge’s last election campaign or that the judge was endorsed for appointment by a group or corporation that opposes our position in court. The current methods of electing or appointing judges offer little comfort in view of their corrosive effect on public confidence in the court system.

    John R. Todd is a Wichita real estate broker. William T. Davitt is a Wichita lawyer.

  • HCR 5009: An attempt to drive down property taxes

    From Representative Frank Miller

    The Kansas Legislative Research Department provided information substantiating that property taxes increased by 126 percent since 1993, yet the inflation rate adjusted for population growth increased only 43 percent! I don’t see how the appraised value of residential property could have risen 2.75 times faster than inflation adjusted for population growth! I would suggest that appraisers are encouraged to over-appraise property in order to satisfy the need for increased property taxes without increasing the mill levy. I authored this bill in the hopes of restraining appraisers from adjusting the value of your property to a value that is higher than market value. Is not the selling price of your home the only true value for “MARKET VALUE”?

    The key wording in the resolution would change the Constitution as follows: “The legislature shall provide that the appraised valuation of real property used for residential purposes which has been sold shall be adjusted to an amount equal to the average of the appraised valuation of such real property when sold determined pursuant to law and the sales price of such real property when sold.”

    The clearest way to explain what this resolution would do is to offer an example. Assume that the latest appraised value of your home is $50,000, but during the year you put your home up for sale. Let’s further assume that your asking price was $55,000, but after much time the best price you could get was only $40,000. The county appraiser would be required by this change in the constitution to reduce the appraised value to half the difference or to $45,000. Is not the closest value to true market value the price a house is sold for on the market? This change reduces, or in like manner increases, the appraised value of residential property in a fair manner and in a manner that mirrors much closer the true market value of property.

    There is nothing in the bill prohibiting appraisers from adjusting the appraised value of your home the following year. However, property owners will have a much stronger argument if the new appraised value represents an unreasonable increase, and this is at the heart of this resolution. The resolution will check the tendency to over evaluate the appraised value of residential property.

    What kind of sales does this apply to? This bill would apply to arm’s-length sales. You could not sell your house to a relative (i.e. son, wife, etc) in order to manipulate artificially the appraised value of your property. I think this bill would be very beneficial to Kansans in trying to keep the escalation of property taxes in check. Unfortunately, the resolution at this moment is stuck in the House Taxation Committee and likely will not get out of committee this year. I will be pushing this resolution again next year. Let me know what you think.

    To contact Rep. Frank Miller write, telephone, or email to P.O. Box 665, Independence, KS, 67301, Tel: (Home) 620-331-0281; Topeka office 785-296-7646, Email frank@frankmiller.org or miller@house.state.ks.us. Take a look at Frank’s updated webpage www.frankmiller.org.

  • Court Sets Trap for Legislature

    I received the following, which I thought was interesting, so I present it. I do not entirely understand the author’s argument, so if anyone can help me understand, I would appreciate it.

    Kansas Legislative Education And Research
    827 SW TOPEKA BLVD TOPEKA, KS 66612
    PHONE: 785 233 8765 EMAIL: ks klear@swbell.net

    Contact: Bob L. Corkins

    Court sets Trap for Legislature

    The Bait:

    “The Kansas Constitution thus imposes a mandate that our educational system cannot be static or regressive…

    “…there is substantial competent evidence, including the Augenblick & Myers study, establishing that a suitable education, as that term is defined by the legislature, is not being provided.”

    “…we need look no further than the legislature’s own definition of suitable education to determine that the standard is not being met under the current financing formula.”

    “…the legislature has failed to “make suitable provision for finance” of the public school system as required by Article 6 § 6 of the Kansas Constitution.”

    “It is clear increased funding will be required…”

    The Snare:

    The Supreme Court requires additional funding and implies that the legislature must do so because constitutional standard of “suitable education” has not been achieved. Increasing funding for this reason would be like walking into a trap.

    Did the Supreme Court say the constitution requires “suitable education”?

    *No*

    The Court said the constitution requires “improvement’ and that the legislature has interpreted this to mean
    “suitable education”.

    The Court merely asserts that Article 6 refers to an improving educational system.

    The Court itself is not making the connection, it’s just claiming that the legislature has interpreted “improvement’ ‘to mean “suitable education”.

    The Court does not even explicitly say it agrees with the legislature’s alleged interpretation.

    Is there anything in the Kansas Constitution that requires a minimally acceptable level of education quality?

    No

    All the Court’s references to minimum quality standards are to those now set (or may have at one time been set) by the legislature, not by the constitution.

    The Court repeatedly states that the legislature failed to satisfy its own standards, not that the legislature failed to satisfy any constitutional standard.

    A statutory standard does not equate to a constitutional entitlement.

    The constitution’s mandate for “improvement” logically refers to students’ opportunity for personal self ‘improvement as compared to their ability to do so in the absence of public schools.

    Suitable education indeed, even uniformly excellent education is a worthy and legitimate public policy goal even if it is not compelled by the state constitution.

    To Avoid the Trap:

    Financing must be increased, but do not do so because current funding violates any constitutional “suitable education” standard.

    All current, and all future, statutory definitions of “suitable education” must make abundantly clear that the legislature is not defining the term as the result of a constitutional mandate, and that “suitable education” is distinct from the true constitutional mandate of “suitable provision for finance”.

  • Rep. Loganbill Advocates More Tax Brackets

    On Saturday February 12, 2005, I attended a meeting of the South-Central Kansas Legislative Delegation. State Representative Judith Loganbill made remarks that included the fact that the maximum Kansas individual income tax rate becomes effective at taxable incomes of $30,000 for singles and $60,000 for married couples. A member of the audience spoke and expressed astonishment to learn this. I didn’t think about it at the time, but I now realize that Rep. Loganbill was advocating more tax brackets with higher rates.

  • Latest Federal School Finance Spending Revealed

    Here is an article from the Kansas Taxpayers Network that reports on school spending: http://www.kansastaxpayers.com/editorial_fedschool.html.

    On Saturday February 12, 2005 I attended a meeting of the South Central Kansas Legislative Delegation. Lynn Rogers, USD 259 School Board President, and Connie Dietz, Vice-President of the same body, attended. There has been a proposal to spend an additional $415 million over the next three years on schools. Asked if this would be enough to meet their needs, the Wichita school board members replied, “No.”

  • Legislative Delegation, Saturday February 5, 2005

    On Saturday February 5, 2005 I attended the meeting of the local legislative delegation regarding the arena tax. Representative Tom Sawyer chaired the meeting. The audience wrote questions on notecards, and Representative Brenda Landwehr read them. To the best of my recollection, the people allowed to answer questions were Sedgwick County Commissioner Tom Winters, Sedgwick County Assistant County Manager Ron Holt, Sedgwick County Director of Finance Chris Chronis, Wichita Mayor Carlos Mayans, and Wichita Downtown Development Corporation President Ed Wolverton. All of these are arena supporters. No one with an opposing view was allowed to speak, except for near the end when Kansas Taxpayers Network Executive Director Karl Peterjohn spoke from the audience for a moment.

    The news that was made during this event was that it was totally scripted by arena supporters, and except for Mr. Peterjohn’s brief remarks from the audience, there was no balance.

    I created a handout for the legislators. A link to it is here.