Politics & Government

March 26, 2010

14 chambers OK higher taxes

TOPEKA — Some local chambers have split with the Kansas Chamber of Commerce by telling the Legislature that they're willing to support tax increases to erase the state's budget shortfall.

TOPEKA — Some local chambers have split with the Kansas Chamber of Commerce by telling the Legislature that they're willing to support tax increases to erase the state's budget shortfall.

Several legislators said Thursday that a letter from 14 local chambers shows that the Kansas chamber is out of touch with local business leaders. But others said the statewide group's strong opposition to tax increases more closely reflects the views of business owners.

The only south-central Kansas chambers included in the group of 14 were in Arkansas City and Hutchinson.

The letter to legislative leaders was also signed by the top executives at the chambers for Dodge City, Emporia, Hays, Kansas City, Manhattan, Olathe, Overland Park, Salina and Topeka. Also signing were leaders of the chambers for Grant County, northeast Johnson County and the greater Kansas City metro area.

Bryan Derreberry, president and CEO of the Wichita Metro Chamber of Commerce, said the Wichita chamber is standing behind its members, who say any new taxes will harm their attempts to recover from the recession.

"I find it hard to believe that any business in the state is saying, 'Add to my taxes,' " he said.

"The whole premise behind our chamber is to help our businesses grow. We have heard that conclusively from them."

The local chambers sent the letter Wednesday to Democratic Gov. Mark Parkinson and both parties' leaders in the House and Senate. The letter said the groups would accept rational tax measures to avoid damaging cuts to schools, higher education and transportation.

The letter has caused a stir at the Statehouse because Democrats and moderate Republicans see it as evidence of growing opposition to deep budget cuts. Also, the Kansas chamber has been influential within the GOP, which controls the Legislature.

"I think the state chamber has taken an untenable position, which has forced local chambers to make their position known," said Senate Vice President John Vratil, R- Leawood. "It undercuts the state chamber of commerce significantly."

But Kent Eckles, a Kansas chamber vice president, suggested that the letter doesn't represent the views of even a majority of local chambers of commerce. Although a dozen of the 14 groups behind the letter belong to the Kansas chamber, the statewide group counts about 80 local chambers among about 750 total members, he said.

Eckles predicted that the local chambers sending the letter will face a backlash from business owners, pushing those local business owners to the Kansas chamber.

"When chambers pull these kinds of stunts, it's a huge boon for us," Eckles said. "People who signed onto this letter clearly do not represent their business communities."

Derreberry said his members think the state should do what they've done: study efficiencies in a tight economy.

"They've all had to look at making their operations more efficient and effective, which has often required making difficult decisions with regard to staffing, salaries and benefits," Derreberry said.

"There's an expectation out there that state government should have to make the same decisions."

Parkinson and legislators must eliminate a projected $467 million budget shortfall for the fiscal year beginning July 1.

The governor proposed raising sales and tobacco taxes, and Senate Republican leaders support a tax package worth about $300 million.

House GOP leaders have outlined a budget plan with no statewide tax increases. The state wouldn't replace $172 million in one-time federal stimulus dollars for public schools, leaving districts with the choice of raising local property taxes to fill the gap.

"Businesses need quality workers who are educated and committed to excellence," the local chambers' letter said. "Workers want to live in communities that provide a quality of life for their families."

"Our students are our future employers, employees and work force," said Janet Siebert, president of the Arkansas City Area Chamber of Commerce. "We try to keep them in Kansas."

"If we can educate our students to keep them here, that is one of the things that we want to do... grow our own local work force," she said.

The chamber board discussed the letter before signing on to it, Siebert said. They viewed K-12, higher education and transportation as economic development tools.

Parkinson said in a statement that because such groups are "on the front lines" in recruiting businesses, they understand the importance of good schools and roads.

"There's always been a sense that the state chamber was representing a much narrower agenda than the local chambers," said Sen. Laura Kelly, of Topeka, the ranking Democrat on the budget-writing Ways and Means Committee.

But Eckles and conservative Republican legislators said school superintendents, college officials and local government officials often are influential in local chambers.

"I think the chambers are totally ignoring small-business members," Sen. Karin Brownlee, R-Olathe, said of the local groups sending the letter. "The chambers have totally forgotten they exist for the promotion of business and not the promotion of government jobs."

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