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Parkinson considers tax hike, fewer cuts

TOPEKA — Gov. Mark Parkinson said he is considering increasing taxes and abolishing some sales tax exemptions next year to balance the budget.

Parkinson took charge of Kansas in late April and has presided over multiple rounds of cuts to state government and a $6.2 billion budget that has since been reduced by about $1 billion.

Further budget shortfalls won't be resolved by more cuts to state government, said Parkinson, a Democrat.

"We have reached a point that in my judgment, in large parts of our budget we cannot cut anymore," he said.

The state is facing a potential $358.7 million shortfall for the 2011 budget year, which begins July 1.

He said he opposes any further cuts in spending on public schools, higher education and the state's prison system.

While the economy shows signs of recovering from the recession, state revenue could lag by as much as a year. Some areas, such as Wichita — which relies heavily on manufacturing — could take longer to bounce back, but time is a recession's greatest enemy, he said.

"Every month that goes away we are closer to the end of the pain that is being felt in Wichita, and it will come," he said.

The following comments are taken from an interview conducted Thursday by The Wichita Eagle's Jeannine Koranda and the Kansas City Star's David Klepper. Both papers are owned by McClatchy Co.

Q: When do you think the economy is going to turn around?

"I don't want to appear insensitive to people who have lost their jobs, are worried about losing their jobs or that may lose their jobs in the future, but on a variety of measurements it appears that things have bottomed out and are probably moving forward.

"Unfortunately, there will still be significant amounts of pain as we go through this recovery.

"Even worse for our state, we have pockets of our state, one of which is Wichita, where the recovery will be much slower because Wichita is so dependent on general aviation. It takes the folks that have the ability to buy small airplanes a couple of years of a recovery before they feel comfortable buying small jets ... or other small aircraft.

"The state as a total is in the process of a recovery. It will be slower in Wichita and southeast Kansas. It will be slower in any part of the state that is dependent on manufacturing, but we are in a recovery right now."

Q: What can the state do to help Wichita and south-central Kansas as it struggles to recover from the recession?

"We need to continue to make this a great place for the aeronautics industry.

"Funding NIAR (the National Institute for Aviation Research at Wichita State University) is very important, funding the new training facility that is in Wichita is very important.

"Other than that it is going to take time for the market to come back to start buying airplanes. It takes patience."

Q: In less than one year you have presided over more budget cuts and spending cuts than any other governor in Kansas history. What is in store for the next year?

"We talked about, when we initially entered into this process back in April, of making budget cuts that were painful but not crippling. In my view we are now at a point that the cuts are either crippling or close to being crippling.

"Additional budget cuts are unacceptable in my view in certain areas. For example kindergarten through 12th public education and our Regents funding — our universities, community colleges and technical schools — is an area we cannot cut anymore without jeopardizing the quality of the product that they provide."

Q: Aside from education, what are you going to fight to protect?

"Corrections is an area that we just can't responsibly cut anymore. The cuts in corrections in my opinion have already jeopardized public safety. We were able to spare corrections from the July allotment but we weren't able to spare it from the November allotments.

"As a result of those cuts, the post-release supervision that is given to parolees has declined.

"Secretary (of Corrections Roger) Werholtz tells me that any additional cuts to corrections could only be funded by releasing prisoners, and obviously that is not good public policy.

"We were able to spare the Medicaid (state's health care program for low income and disabled) reimbursement rate until the November cuts. In November we announced a 10 percent reduction in Medicaid reimbursement.

"That cut is very poor public policy. It results in the poorest in our society losing access to important care and it penalizes the health care providers that are willing to take care of the poorest in our society.

"Even though we've cut a billion dollars from our budget we still have a major challenge in 2011, which is to fund these programs at just the minimum level that I view as acceptable."

Q: What tax proposals will you be considering in the next session?

"Because I've taken the position that we cannot cut these programs anymore we are going to have to come up with some additional revenue.

"That revenue could come from a variety of sources: It could come from a tax increase, it could come from an elimination of sales tax exemptions, it could from receiving addition money from the federal government... it could also come from a sudden upturn in our revenues that exceed what our... revenue projection estimates have held.

"All of them are on the table. The one thing that is not on the table are additional cuts."

Q: Some lawmakers believe there are millions of dollars out there in unspent money that could be used instead of cuts. Do you think that is true?

"No. If there is unspent money out there to use to keep from cutting programs I just want them to let me know where those funds are and we will analyze them.

"There are certainly parts of the government that have funds in the bank, and that is because they have obligations.

"So, I know that there are these people that have talked about how there is $2 billion sitting around in various state agencies and various local units of government. Show me the money."

Q: Private employers have cut pay and furloughed employees to get through the recession. Why shouldn't the state do the same with its employees?

"We've allowed our cabinet heads to make their own decision on how they were going to continue to provide services with the money we have given them.

"I've said to the cabinet heads, 'If you need to furlough people, if you need to lay off people, I'm not happy about that but I understand it.'

"The decision each of those agencies make are their own decisions. I think an across the board cut or an across the board furlough is just not good public policy right now and it is just not something that we need to do."

Q: What do you tell voters who are disappointed by your decision not to pursue a full term. Do you feel you have let them down?

"My obligation when I ran wasn't beyond four years, it wasn't to sign up to do this for the rest of my life. It was to sign up to do as good of a job as I can for four years."

Here is the governor's stance briefly on three issues that are likely to arise during the next legislative session:

Q: A tobacco tax increase?

"It is good public policy, not just because it raises funds but because it is the only proven way to reduce teen smoking."

Q: Statewide smoking ban?

"The evidence of the benefits of a statewide smoking ban are clear.

"We have kind of a hodgepodge of laws across the state with one community doing one thing and another doing another thing, and I think that it is time that we join the other states that have taken the right move of banning smoking statewide."

Q: A ban on texting while driving?

"Hopefully, I will get a law that will ban texting."

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