Kansas State Sen. Jim Denning is pushing a complex proposal that might generate $600 million to balance the state’s fiscally distressed budget.
But the Overland Park Republican’s plan has a largely duplicitous, even hypocritical, side to it.
Denning, vice chairman of the Senate’s Ways and Means Committee, is pushing seven tax increases to help generate more than half that money.
Sure, Denning knows all about the much more responsible one-point plan to prop up Kansas’ budget: reduce or eliminate the costly income tax cuts that Gov. Sam Brownback and the Legislature put in effect in 2013. They have drained hundreds of millions of dollars from the budget.
But Denning doesn’t want to mess with a tax policy that largely benefits the well-off, even as Monday looms. That’s when state officials discuss a new consensus revenue estimate for Kansas, with the possibility that the deficit could grow larger than $600 million in the next budget.
Instead, the GOP leader is pushing those tax increases. Yes, this is coming from a guy in a party that gets its members into office by saying “Kansas families need to keep more of their money,” as House Speaker Ray Merrick of Stilwell put it recently.
Now that the tax cuts have blown up in Brownback’s face, however, his followers in the House and Senate have to decide:
Will they vote for higher taxes? Or will they cut the budget by a very large amount — something they have shown no ability to do in the last two years?
Here’s Denning’s tax-increase plan.
1. Tax e-cigarettes.
2. Raise taxes on some owners of small businesses and farmers by “fixing” a flaw that Denning claims exist in the current tax-cut law. Guess what? The small business people currently taking advantage of that supposed loophole will see it as a tax increase.
3. Raise the statewide sales tax from 6.15 percent to 6.3 percent. That’s a regressive tax, something the GOP pushes because it doesn’t hurt the rich as much financially.
4. Raise the gasoline tax by 5 cents, to 29 cents a gallon. That also would be a regressive tax. It would place Kansas 12 cents a gallon higher than Missouri, where GOP lawmakers are balking at a proposed measly 2-cent gas tax increase.
5. Raise taxes on business income earned in Kansas by nonresidents.
6. Raise the tax on managed care organizations that administer KanCare. These are the firms already worried they can’t make enough money privately managing the state’s Medicaid program.
7. Raise taxes on Kansans by reducing how much they can claim on itemized deductions.
Denning says he thinks the Legislature will pass all of his plan quickly when it comes back into session in late April and early May.
Oh, and he says lawmakers won’t approve the liquor and cigarette tax hikes that Brownback has proposed.
Kansas residents will soon see if the Republican-dominated Legislature will stick to its anti-tax stance — or open the floodgates to new and higher taxes to soak residents, all to pay for the tax cuts being selectively enjoyed by several hundred thousand other Kansans.