Politics & Government

June 30, 2014

Gubernatorial candidate Paul Davis unveils plans for tax policy, economic development

The state should stop cutting taxes until base state aid for education is restored to pre-recession levels, Paul Davis, the Democratic candidate for governor, said Monday.

The state should stop cutting taxes until base state aid for education is restored to pre-recession levels, Paul Davis, the Democratic candidate for governor, said Monday.

Davis, an outspoken critic of the cuts’ impact on state revenue, stopped short of calling for full repeal of the income tax cuts.

“We need to hit the pause button,” he said.

Davis said he would freeze income tax rates at their 2015 levels: 4.6 percent for the top bracket and 2.7 percent for the lower bracket. Under Gov. Sam Brownback’s plan, the lower rate is slated to drop to 2.4 percent in 2016, and the top rate is set to fall to 3.9 percent in 2018.

Davis unveiled his economic and tax policy plans at a pair of events Monday – at an elementary school in Kansas City, Kan., in the morning and at the National Center for Aviation Training in Wichita in the afternoon.

Davis, the House Minority leader who represents Lawrence, emphasized that he plans to take a bipartisan approach to economic policy. He was joined by his running mate, Jill Docking, a Wichita businesswoman, and his newly announced team of economic advisers, former Lt. Govs. Gary Sherrer and John Moore.

Sherrer, a Republican who served with Gov. Bill Graves, called the state’s current fiscal policy “worse than a dead end.”

He cited the state’s revenue shortfalls in April and May, which totaled more than $300 million, and the decision by Moody’s Investor Services to downgrade the state’s bond rating. He said this threatened future economic development.

Acknowledging the setting, Piper Elementary School in Kansas City, he said that economic development begins in elementary schools.

“Don’t you forget that,” said Sherrer, who once served as secretary of commerce.

Davis said the state should boost base aid for schools back to $4,492 per student. It will be $3,852 in this fiscal year.

Brownback has compared the tax cuts to surgery. Davis honed in on this metaphor. “Then our first job is to stop the bleeding,” he said.

Davis called for the formation of a bipartisan commission on tax policy aimed at lowering local property taxes, strengthening incentives for job growth and ensuring accountability in the tax code.

Davis said the Brownback tax plan gives away millions of dollars regardless of whether jobs are created and that the state should treat its tax policy like other economic development programs and demand measurable results.

Mark Dugan, Brownback’s campaign manager, responded to Davis’ economic proposals in an e-mail.

“Sam Brownback is confident that Kansans can spend their money better than the government,” Dugan said. “Paul Davis and his new economic advisors apparently think bureaucrats in Topeka should control every last penny we earn because they are confident the government can spend our money with more accountability than the people of Kansas. They are wrong.”

Dugan contended that total education spending has increased under Brownback and accused Davis of having a record of raising sales taxes.

“Paul Davis has a 12-year record of voting to raise sales taxes, voting to raise income taxes, and voting against property tax relief for hard-working Kansas families and his plan unveiled today is more of the same,” Dugan said.

Davis voted against a school bill that included property tax relief. However, he has voted for and proposed property tax relief regularly, according to his campaign spokesman, Chris Pumpelly.

Davis said he was ready to have a debate with the governor over taxes and that he has consistently voted for responsible tax cuts.

The state took in $727 million less this year than it did in the previous fiscal year and came in $338 million below estimates, according to a release from the Department of Revenue sent out late Monday.

Sherrer said that the true fiscal impact of the tax cuts was being obscured in the political debate.

“It’s not what Sam says or Paul says. What does Moody’s say?” he said. Moody’s Investor Service, one of the nation’s two major debt rating agencies, downgraded Kansas’ credit rating to Aa2 in May.

Davis pointed out that Kansas was one of only five states to see the total number of jobs decline between November and May.

However, the Brownback administration has repeatedly emphasized that Kansas’ 4.8 percent unemployment rate is much better than the national average.

Davis contended that the low unemployment numbers were partially caused by a thinning workforce.

He said that strengthening public-private partnerships also is needed in order to spur economic development. He called the NCAT facility a shining example of what happens when local government, state government and private industry collaborate.

He also emphasized the importance of improving the state’s infrastructure and warned against draining the highway fund in order to cover the state’s other expenses.

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