Tax Hike Fever in Topeka
By Paul Waggoner, House of Representatives, District 104
The Kansas legislature in 2017 has been unpredictable, even wild, as the various factions of moderates, liberals, and conservatives have put forth new proposals. Throw in a chastened Governor Brownback and his veto pen and no one could foresee the final policy results.
But now the budget has been approved and the smoke has at last cleared. And you, Kansas voter, need to look carefully at this landscape.
This landscape now includes a “new” all-time largest tax increase in state history, the much lauded Senate Bill 30. It comes in at just over $1.2 billion in new taxes in 2 years, and on the GOP side, you can thank Senator Ed Berger (R-Hutchinson) and Rep. Steve Becker (R-Buhler) for the pleasure.
Under SB 30, if your wages are under $ 60,000 a year your tax rates are going up 14% by 2018, and if your household makes over $60,000 your new tax bill will be 24% higher than in 2016.
But wait a second, you say, I thought they were just trying to make those lucky small business owners pay up, by closing the “LLC loophole”. Well yes, that was part of the new law, but you, the taxpaying individuals are on the hook for $724 million more as well. Surprised?
Opinion polls showed strong public support for also using spending cuts to balance state finances. One committee vote even sought a 5% , then 1%, then 0.5% across the board spending cut but, in 2017 Topeka, it failed, failed and failed.
I asked Senator Berger why he didn’t support even this token spending decrease. He said “it was not fair” to do this to government agencies “with only 3 months left in the fiscal year”. But then, in June, Berger voted to retroactively increase 2017 taxes on small businesses, with only 6 months left in the calendar year. Is that fair Senator?
Further, the final version of SB30 refused to put forth any savings from the Alvarez and Martinez efficiency study because they didn’t think it would work. A $6.3 billion state budget and nary a nickel can be saved through efficiency?
Sen. Berger and Rep. Becker in the end not only couldn’t see any way to cut spending they actually voted to raise spending. SB 30 comes with $ 280 million in spending increases over the previous budget cycle.
Part of this spending increase was $27 million for an extra 2.5-5.0% pay increase for all state employees. Sen. Berger justified this to me by stating “state employees have not had a pay increase since 2009” and that bothered him greatly.
Unfortunately for Berger, the Kansas Sentinel in an online story in June provided a link to the Kansas State Civil Service Pay Plans (google it) where you can see state pay details.
It showed state employees in any job have automatic “step increases” of roughly 2.5% a year, for up to 14 years, regardless of overall pay changes. Thus the same position (level 21 for example) that paid $ 15.03 a hour in 2009, now pays $ 18.26 per hour, and will pay $21.13 per hour in 6 more years. So much for no “pay increases”. Welcome to Topeka.
Another aspect of tax savings that SB 30 ignored was the $195 million the conservative “Truth Caucus” found by simply requiring school districts to spend down excess unencumbered cash reserves. It is not widely known but school district ending cash has doubled in 10 years (to over $900 million).
Berger made a big issue (correctly in my view) of the necessity of having a 7.5% ending balance for the state of Kansas. But here we have government entities with a 15-25% ending cash balances and he just ignores that fact and socks voters with even higher taxes.
Maybe this is what you would expect from someone who has worked his entire life for the government, but Berger campaigned in 2016 as a “responsible” conservative and his voting record seems anything but.
Rep. Becker’s motivation is different in all this. He is the classic tax-and-spend politician. He just stuck most of the households in his prosperous district with up to a 24% tax hike and he gushes on his June 6th Facebook “the ship has finally been turned. The future of this Great State has brightened tonight.”
Or is it rather the “future” for Topeka bureaucrats, lobbyists, and special interests, who FYI provided the bulk of Beckers campaign funds the last 5 years, brightened quite a lot? I would think it is the later.
Change is a constant in politics. But the tax changes approved in Topeka in 2017 were, on the whole, disappointing, disillusioning, and mostly unnecessary.
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