Editorials

Sales-tax exemption debate overdue

It was telling how the House Taxation Committee forwarded legislation to roll back some exemptions to the state's 5.3 percent sales tax — without recommendation.

Legislators don't want to be caught in an election year endorsing what someone somewhere might consider a tax increase. At least not at this point in the session.

Never mind that revenue is so down that the state is delaying school aid (and probably income-tax refunds) and facing a $400 million-plus budget shortfall for fiscal 2011, and Gov. Mark Parkinson plans to announce more changes in the current budget today — after five rounds of cuts in this fiscal year.

Repeal of the exemptions seems unlikely at best, of course, especially with sales tax on utility bills and churches' purchases in the mix. Even taxing Kansas Lottery tickets is a hard sell, because doing so would exclude Kansas from the multistate lottery drawings and their big jackpots.

Unfortunately, the committee blinked in eliminating language that would have erased sales-tax exemptions for specific nonprofits — which include some of the most illogical breaks of all, alongside many that serve countless good works.

But at least now there is the prospect of a true House debate on Kansas' array of sales-tax exemptions, perhaps as soon as next week. That's overdue.

The state obviously could use the $170 million a year that passage might bring. Plus, as state Rep. Jeff King, R-Independence, said: "We're not going to get anywhere by hiding the ball and ducking debate."

The state's sales-tax exemptions multiplied from 30 in 1985 to 96 in 2009, saving selected taxpayers $4.2 billion last year while increasing the tax burden on the rest. The Revenue Department has estimated that if all the sales-tax exemptions were eliminated, the state could reduce its sales tax to 3.3 percent and still collect the same amount of revenue next year.

It's not too much to expect legislators to go to the floor and make the case for these exemptions — especially in a year when keeping every sales-tax break could mean devastating cuts to social services and schools.

As Revenue Secretary Joan Wagnon told the Winfield Area Chamber of Commerce this week, the state's tax breaks for businesses and nonprofits should be balanced with the state's need for revenue.

"The policy right now is if you can find a parking place at the Capitol and you can walk up the stairs to the hearing room, you get (an exemption)," she said, exaggerating only a little in making her valid point.

By the end of the session, many lawmakers may look on these and other budget-balancing measures as more pragmatic than radioactive. For now, though, even the hands-off advancement of the bill was a welcome surprise.

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