Revenue secretary: Without cuts, lawmakers face tax increases again

The leader of Kansas’ revenue agency predicts lawmakers may have to raise taxes again in two years unless they cut spending and make government more efficient.

Revenue Secretary Sam Williams made the comments in an emailed statement days before higher income tax rates go into effect.

“This largest tax increase in state history funds the largest budget in state history,” he wrote. “The legislature’s budget funds more than $200 million in new spending — that is spending above the increased funding for schools,” Williams wrote. “Despite the legislature’s historic $1.2 billion tax hike, they’ve already spent every dime.”

“Unless cuts and efficiencies are made, the legislature will be looking at more taxes in two years.”

The Legislature approved the tax bill earlier in June to help balance the budget. Brownback vetoed it, but lawmakers overrode the veto.

Williams’ statement, distributed Wednesday, was circulating among lawmakers but didn’t appear to have been released publicly. The Eagle obtained a copy, and a spokeswoman for the Department of Revenue confirmed its authenticity. The spokeswoman later said it had been sent to The Eagle as an op-ed.

Williams’ message joins a swell of criticism by tax increase opponents as the new law takes effect Saturday. In some instances, his email repeats word for word a statement released by Brownback on Monday. But it also expands on the governor’s comments.

The new law essentially rolls back much of Brownback’s 2012 tax cuts. It raises personal income tax rates, restores a third tax bracket and eliminates an exemption for certain kinds of business income. Over time, it will also restore several tax credits and deductions, including for child care and medical expenses.

The tax increases are projected to raise about $1.2 billion over two years. Taxpayers still will pay less than they did before the 2012 tax cuts.

‘Will not balance’

Future tax increases are within the realm of possibility, said Rep. Steven Johnson, R-Assaria, who chairs the House tax committee. He said the budget balances on paper for the next few years.

But then the numbers potentially no longer add up.

He referred to the possibility that the Kansas Supreme Court may find a new school funding plan inadequate and require an additional increase in school spending.

“With the increases in education that are possible, with the increases in pension payments that are projected, you will not balance with the tax plan as it is projected,” Johnson said.

Rep. Tom Cox, R-Shawnee, said some lawmakers either want to raise taxes again or have predicted that will happen, but he isn’t one of them.

“I don’t think I could support another income tax increase in our state,” Cox said. “I’m more at the point now if we can’t get our fiscal house in order, then that’s on us. We shouldn’t keep shifting the burden to the people. I think we’ve found that balance of what the tax structure should be at this point.”

‘Drastic departure’

Brownback and his office have criticized the budget as funding a “legislative wish list.”

“This session marks a drastic departure from fiscal restraint. I trust that future legislatures will return to a pro-growth orientation that will once again set Kansas on the path toward becoming the best state in America to raise a family and grow a business,” Brownback said Monday.

The governor has not said what spending is unnecessary. He did not make line-item vetoes to cut spending in the $15.6 billion budget and he did not use his executive power to make budget cuts himself before the session.

“If they think the budget is $200 million too high, why don’t they step up” and advocate not making pension payments, or cutting Medicaid or rescinding raises for state workers, said Senate Vice President Jeff Longbine, R-Emporia.

“Where do they think that $200 million is?” he said.

Rep. Kathy Wolfe Moore, the ranking Democrat on the House budget committee, said “what we did was restore fairness.” A tax exemption for business income had been criticized as unfair because it allowed some business owners to collect income tax-free while their employees paid income taxes.

She added that “the responsible legislators had to step up and deal with this mess.”

On Wednesday, the Kansas chapter of Americans for Prosperity announced it would send out mailers in support of lawmakers who voted against the bill. State director Jeff Glendening said it marked the beginning of the group’s efforts to hold legislators accountable for their vote.

The final vote to override the governor’s veto of the tax bill passed the House 88-31, and the Senate 27-13.

“These legislators deserve praise for standing up for hard-working Kansas taxpayers instead of cowering to outside pressure to raise taxes,” Glendening said. “These legislators understand our problem isn’t revenue but our ever-increasing government spending.”

Supporters of the bill aren’t backing down, however.

“I think it’s somewhat outrageous that the people that didn’t have the courage to step up and do the right thing are now somehow being thanked for their vote to not override the governor,” Wolfe Moore said.

Contributing: Hunter Woodall of the Kansas City Star

This story was originally published June 29, 2017 at 1:07 PM with the headline "Revenue secretary: Without cuts, lawmakers face tax increases again."