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Kansas, Wichita chambers of commerce focus on defending previous tax cuts

  • The Wichita Eagle
  • Published Wednesday, Jan. 8, 2014, at 8:04 p.m.

What do you ask for when you have nearly everything you wanted?

The Wichita and Kansas chambers of commerce had such successful 2012 and 2013 sessions in the Kansas Legislature that now they’re just trying to ensure that no one takes their gains away.

Over the last two sessions, the Legislature and Gov. Sam Brownback eliminated some business income taxes and machinery and equipment property taxes. They lowered personal income tax and sales tax, phased out franchise and estate taxes, and passed a host of measures to strengthen the hand of employers in dealing with employees.

“We did have a very successful year last year,” said Jason Watkins, the main lobbyist for the Wichita Metro Chamber of Commerce. “We got not everything, but almost everything that was on our agenda.”

The chambers say that this year they will play defense, encouraging legislators to either fend off claims for increases in spending – or to seek off-setting cuts elsewhere. Such requests for additional funds are likely to come from Wichita State University and other state universities – which saw $33 million in reductions for fiscal 2015, plus a salary cap Additional funding requests also are likely to come from the court system, which will see an $8 million shortfall for fiscal 2015 and the prison system, for which the Brownback administration wants $10 million in cuts restored.

And the biggest funding issue of all could be funding for elementary and secondary education, depending on the how the Kansas Supreme Court rules.

The Legislature opens it 2014 session Monday.

The court is considering what position to take on a district court panel’s ruling last year that public schools are unconstitutionally underfunded. If the court backs that ruling, it could ask the Legislature to come up with at least $440 million in additional annual funding for schools.

The Legislature then would have several options: raising taxes; finding the money elsewhere; or a combination of the two – or defying the court and setting off a constitutional crisis.

Watkins said the Wichita chamber leadership has talked about the court case, but will wait until the ruling comes down to stake out a position. The chamber wouldn’t advocate for outright defiance, he said.

“I don’t know that as an organization that we would feel that it would be appropriate for us to tell a legislative body, one branch of government, to defy another branch of government,” he said. “That seems like a stretch.”

Mike O’Neal, president and CEO of the Kansas chamber, agreed this week that defending the last two years’ tax cuts in the upcoming session is paramount.

“We will be playing defense,” he said, at a forum for small businesses in Kansas City, Kan. “What we have accomplished, we want to make sure we keep.”

It’s something that businesses all over the state are intensely interested in, according to Kansas chamber poll, released Tuesday.

According to the survey, 57 percent of Kansas CEOs and executives thought taxes were too high, despite the 2012-13 reductions. That’s a higher percentage than said that in 2012.

O’Neal confessed to some confusion about the results after the previous victories. Some of respondents may not have realized the effect of the tax cuts, yet, but will when they file their return this year, he said.

“They may not understand that tax reform is a gift that keeps on giving,” O’Neal said.

He said that the Kansas chamber will push for bills that limit the ability of local governments to raise property taxes, which he said are the most hated form of taxation.

There is also still a concern about unemployment taxes, which remain high as they pay down debts in the state trust fund.

Other top issues for the Wichita chamber:

• Restore $2 million to the National Center for Aviation Training. NCAT in the past years has received $5 million, but was awarded $3 million in the last session.

• Preserve the $5 million subsidy for air service at Wichita Mid-Continent Airport and $5 million for the National Institute for Aviation Research at Wichita State University.

• Move from pensions for state workers to a contribution-based, 401(k)-like, retirement system.

• Eliminate the mandate for utilities to purchase a certain percentage of renewable energy.

The chamber’s legislative agenda contains a number of education initiatives this year, after having very few over the last few years. These measures include giving school districts more flexibility in how they can spend state dollars and more flexibility from “burdensome” regulation; support for public-private research partnerships at state universities; support for technical education as a way to build a skilled workforce; and support for science, technology and mathematics learning efforts.

Contributing: Bryan Lowry of The Eagle

Reach Dan Voorhis at 316-268-6577 or dvoorhis@wichitaeagle.com. Follow him on Twitter: @danvoorhis.

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