Business

Business's message to Topeka: Don't raise taxes

Message from business groups to the Kansas Legislature: Remember who's going to pull you out of this recession, so don't raise taxes on us.

Local and state business groups are putting on a grimmer face than usual as they head to Topeka to follow legislators' efforts to close a projected $400 million budget gap.

Local legislators have been told by local business that they must resist raising taxes and defend a host of high-profile research and economic development investments, such as airfare subsidies and aviation and composite research.

To help defend those investments, the Wichita Metro Chamber of Commerce hired former legislator Jason Watkins as its chief lobbyist.

Watkins said most legislators understand that business is the state's economic engine.

"Those things are all critical to help us get out of this recession," he said of the various projects. "These are not feel-good 'asks.' These all have a proven return."

Small-business owners, already facing a sharp downturn in revenue, have turned an anxious eye toward Topeka.

"They're petrified about what's coming down the pike," Jo Zakas, owner of Clifton Square shopping center, said about business owners.

Many members of the Legislature say they support business and are against raising taxes, but it's a long session full of hard choices.

"The sense I get of how this process will start," said Rep. Jim Ward, D-Wichita, "is that it will start with cuts in mind and from there it will depend on what can get votes at the end of the day."

House Speaker Mike O'Neal, R-Hutchinson, set the anti-tax tone in the wake of Gov. Mark Parkinson's call for a sales and tobacco tax increase by saying that the schools have seen a $1 billion spending increase in recent years and can afford to absorb much of the needed cuts.

There also will be multiple efforts by legislators to ferret out what they say could be ineffective or wasteful state spending, said Sen. Carolyn McGinn, R-Sedgwick.

Still, she said, finding enough cuts to close the gap will be hard and results are hard to predict.

"I don't know how this will come out," she said.

Chamber priorities

The South Central Kansas Unified Legislative Agenda, which is backed by the Wichita Metro Chamber, includes full funding for:

Subsidized airfares at Wichita Mid-Continent Airport, the National Institute for Aviation Research at Wichita State University, the National Center for Aviation Training at Jabara Airport, the Wichita Center for Graduate Medical Education Program, and the Center for Innovation for Biomaterials in Orthopaedic Research, among others.

This year the chamber is working the problem a little differently. Rather than just asking for the money, it is telling legislators that the state hasn't distributed existing economic development funds fairly.

South-central Kansas generates between 27 and 30 percent of the taxes in the state, but it has gotten between 9 and 18 percent of the state's economic development funding.

"We're putting in at a much higher level than we are receiving," said chamber president Bryan Derreberry.

Tax shock

Some local businesses have already gotten their first tax shock of the year, when they received their unemployment tax assessments from the state.

Pete Schrepferman, owner of Johnstone Supply, a heating and air conditioning supplier, said his assessment went up 3 1/2 times despite the fact that he hasn't laid off anyone in his 28 years in business.

O'Neal, the House Speaker, said the average unemployment compensation tax more than doubled. The money is needed to replenish the depleted unemployment compensation fund.

All Schrepferman got was a letter listing his new assessment rate, he said. No explanation of how he got there.

"I understand (the unemployed) have got to have some income and the whole economy is down, and there's not a bucket of money anywhere for the state to get it, but it would be nice to have a better explanation," he said.

Tim Witsman, president of the Wichita Independent Business Association, has been collecting those rate increases, and said he's seen them range from 30 percent to 750 percent, usually with little explanation.

It's the kind of unpredictable and uncontrollable cost that makes business owners sweat, he said.

He's got just one plea for legislators:

"Just leave us alone this year," he said. "We don't even want a Christmas card."

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