The Rapidly Changing Landscape Of Kansas Taxes
Twenty-four hours in politics is like a year in ordinary life, when surprising and unexpected happenings occur.
Governor Brownback asserted in his State of the State speech that the “march to zero” on income taxes would continue in Kansas. Twenty-four hours later, the administration announced that this “march” would be slowed.
Two new tax proposals were also announced. One is a 300 percent increase on a pack of cigarettes, from 79 cents to $2.29. The other raises the tax on liquor from eight percent to 12 percent.
Even if the legislature approves these proposals, there are doubts that Kansas has enough smokers and drinkers to do much to close a projected budget deficit of $648 million for the coming fiscal year. Also, creative entrepreneurial and “bootlegger” types, and many consumers, will purchase cigarettes and hard liquor in surrounding states with lower taxes. Missouri’s tax of 17 cents on a pack of cigarettes is the lowest in the country.
The governor is expected to ask the legislature to repeal the formula for funding K-12 education, which could provide the “time out” that the governor wants from the lawsuit charging the state with “inadequate funding” of K-12 education. A new formula for funding K-12 education could be the centerpiece of Governor Brownback’s tax and revenue policies and perhaps his legacy, but this may not get rid of the curse of the Gannon law suit charging “inadequate funding.” Also, we do not know how the block grant proposal for school funding will work while a new funding formula is being developed.
Watch for more possible cuts in state spending.