The Kansas House and Senate seem to be feeling their way on tax reform rather than following any playbook, including the governor’s, or even doing basic math at times.
It’s been fascinating to watch lawmakers look hard at the realities and opportunities of tax policy in the state, including during a House debate that lasted more than five hours Tuesday.
But tax reform needs to make fiscal sense and broadly benefit Kansans. And it’s hard to disagree with state Rep. Nile Dillmore, D-Wichita, that House members were being “fiscally irresponsible and intellectually dishonest” Wednesday in approving that chamber’s reform bill. That legislation could reduce state revenues by nearly $2.2 billion over five years, while its 3 percent cap on state-spending growth essentially makes permanent the punishing budget cuts of the past few years to education, social services and other programs.
The session can’t be going as Gov. Sam Brownback had hoped in January when he unveiled his bold plan to phase out the state income tax, extend the temporary sales-tax increase and eliminate a host of tax credits he viewed as social engineering.
But it’s to the credit of state legislators that they have been willing to second-guess so much of the Brownback plan, which was heavily influenced by the suspect advice of Reagan economist Arthur Laffer. Indeed, the version of Brownback’s proposal that passed out of the Senate Assessment and Taxation Committee Wednesday was missing key parts, though it still would break the promise made by the 2010 Legislature to end the temporary 1-cent sales tax in 2013 and ignore real-estate agents’ pleas to continue the mortgage tax deduction.
Though the prime goal for many remains doing something to reduce the state income-tax burden, lawmakers have wandered away from that long enough to at least acknowledge that property taxes are what Kansans truly hate and, in the House, even pass a long-sought repeal of sales tax on groceries.
They also wisely seem to be steering clear of proposals to rob the transportation plan, end the historic tax credits that have been so vital to Wichita’s downtown revitalization, and eliminate the earned income tax credit (though the House would cut it in half).
Where this is going remains anybody’s guess – and many people’s worry. The hope is that lawmakers will continue to be deliberative, and resist the temptation to pass some radical reform at the last moment that might serve re-election this year but hurt Kansas’ ability to cover its obligations for years to come.