The Legislature’s flailing about this week, including the House’s stunning passage of an unbalanced two-year budget without debate, at least has seen some worthy tax issues teed up for overdue consideration – repealing sales tax exemptions, reducing the sales tax on food, and curbing property taxes. Too bad the time, place and manner for all three discussions have been all wrong:
▪ On Sunday night, Sen. Steve Abrams, R-Arkansas City, proposed a sweeping rollback of sales tax exemptions. The Legislature has been shameless in passing exemption after exemption since 1985, growing the list from 30 to more than 100 costing nearly $5.9 billion in lost annual revenue. In 2008 it even gave one to a Kansas City, Mo., animal welfare group.
Lawmakers always have chickened out when presented with opportunities to repeal exemptions and make the sales tax base broader and the system flatter and more equitable.
But Sen. Les Donovan, R-Wichita, was right Sunday night: It would have been an unfair blind side of now-exempted groups to pass Abrams’ confusing amendment without the benefit of hearings. Abrams’ amendment, defeated on a 9-30 vote, also was inexplicably selective, newly requiring public schools to pay sales tax on purchases while still exempting private schools, for example.
▪ One glaring error of Kansas’ tax policy long has been its sales tax on food purchases, currently at the full statewide rate of 6.15 percent. Only Mississippi charges more, while most states humanely exempt the basic necessity of food from sales tax entirely or greatly reduce the rate. In a 2014 Fort Hays State University poll, 86.6 percent of Kansans surveyed said they supported eliminating sales tax on fruits and vegetables.
But the recent competing proposals – including a Senate-passed 5.7 percent food tax, and House-Senate negotiators’ agreement on a 5.9 percent rate for next year – seem nonsensical in the context of the $400 million budget deficit.
Lawmakers should come back to the issue when the state can afford to do the right thing, which is to eliminate food sales tax entirely and take the revenue hit of $390 million a year.
▪ Kansans also hate property taxes, which is no doubt why senators eagerly voted Tuesday to force county and city governments to hold a public vote before taking in more property tax revenue. But that 11th-hour proposal is an unvetted mess and a complete overreach by the state. It’s especially galling because many recent local property tax hikes have been in response to cuts and broken promises by the state. If the Legislature really wants local leaders to hold the line on property taxes, it will curtail unfunded mandates to local governments and ensure that state funding is suitable and reliable.
If the timing, context and proposals have been off regarding sales and property taxes, there’s always next year. Let’s hope the 2015 session will have adjourned by the time the 2016 Legislature gavels in.
For the editorial board, Rhonda Holman