McGinn calls for early end to 1% sales tax hike

12/05/2011 5:00 AM

12/05/2011 10:57 PM

Sen. Carolyn McGinn, R-Sedgwick, wants to roll back part of the 1 percent sales tax increase the Legislature approved last year in the face of a major budget shortfall.

The move would bring the sales tax rate from 6.3 percent to 5.7 percent on Jan. 1, 2013. It would otherwise roll back to that rate in July 2013. The remaining .4 percent of the increase was dedicated to the new 10-year transportation plan and would remain.

“Our revenues are coming back, and I feel like as a legislature we should fulfill our promise and make sure it ends,” she said. “If we can do that six months earlier, then we should.”

McGinn, who chairs the Senate Ways and Means Committee, said state revenues have been improving for six to seven months. She said lawmakers probably will have an even greater understanding of the trend by the time the proposed rollback would be voted on, most likely after consensus revenue estimates are presented next April.

An estimate in November showed the state would haul in about $200 million more than expected in the next fiscal year.

McGinn said the state’s sales tax increase ties the hands of local governments and that lowering it sooner than expected provides them more flexibility. That could be particularly important if Gov. Sam Brownback’s administration moves forward with a new school funding formula that allows counties to approve additional sales tax for schools, she said.

“You should not have a sales tax that was intended to be temporary to fix a problem because of our recession to remain on in the event that local government needs that tool for their own communities,” she said.

McGinn said she’s not aware of any imminent plans by Wichita-area communities to enact a sales tax increase. But Brownback’s policy director, Landon Fulmer, has indicated that the administration’s school finance plan would remove a cap on how much counties could increase sales taxes to fund schools.

The proposal was met with skepticism by Gary Mason, CEO of iSi Environmental Services, who plans to run against McGinn in the 2012 Republican primary election.

“Mrs. McGinn’s attempt to reposition her tax record has more to do with politics than policy,” he wrote in a prepared statement. “Because of my entry into the Senate race Carolyn McGinn is now asking for a do-over.”

Mason has not officially filed for the seat, but he has appointed a treasurer and said he intends to formally announce.

“I believe economic recovery has more to do with the condition of those in my neighborhood and community than the condition of my government,” he wrote.

McGinn said her proposal is based on improved revenues and the impact of the sales tax on local governments. Brownback’s school finance plan is expected to allow counties to increase sales taxes to fund schools, but McGinn said she doesn’t know how likely Sedgwick County voters would be to approve an increase. She questioned how voters would react if the plan, as has been outlined conceptually, sends part of any increased county sales tax to schools statewide to equalize funding.

“It’s one thing to pass a sales tax and know that the benefit you’re going to gain is going to stay there in the county,” she said. “I don’t know how excited people will be about passing a sales tax knowing part of it will go to all parts of the state.”

Joan Wagnon, chair of the Kansas Democratic Party and a former secretary of revenue under former Democratic governors Kathleen Sebelius and Mark Parkinson, said cutting taxes should not be the state’s top priority.

“They need to make sure they’re restoring funding for schools before they start cutting taxes,” she said.

Wagnon said she remains nervous about how financial problems in Europe could affect the nation and the state.

“My measure is have we done right by the school kids,” she said. “Cutting taxes is not our highest priority in this state. People want their schools funded and their kids taken care of.”

Sherriene Jones-Sontag, the governor’s spokeswoman, said Brownback was likely to announce his proposal early in 2012, possibly during his State of the State address on Jan. 11.

"Gov. Brownback welcomes all suggestions on how to create new jobs and increase the income of Kansans through tax reform," she said.

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