The Governor’s Council on Tax Reform began work late last month to take a sharp look at sales, property and income taxes in Kansas, and how they may be shaped more equitably for the future.
This is not moon-gazing. The Brownback years have left Kansas with lingering debt, a badly damaged tax structure and revenues susceptible to crippling fits of anemia. Despite mild progress in returning black ink to the state ledgers, analysts project a $14 million operating deficit in 2022. If nothing is fixed, the budget deficit in 2023 is projected at $482 million.
These estimates come from experts, not candidates for office. They also mean trouble from the Kansas Constitution, which says the state cannot spend money it doesn’t have.
The Council’s mission is to confront this specter and craft a plan to avoid it. Gov. Laura Kelly’s executive order directs the Council to find and recommend policy that will keep taxes low and government in the black.
The 21-member Council is chaired jointly by former Senate President Steve Morris, a Hugoton Republican, and Janis Lee, a Kensington Democrat and former ranking minority member of the Senate Tax Committee. Audrey Langworthy of Prairie Village, a former Senate Tax chairman, is a member of the Council. The panel also includes current House and Senate leaders, and former officials experienced in budget matters. There are also representatives of cities, counties, school boards, and delegates from the state’s business, commerce, economic development and agricultural sectors.
Senate President Susan Wagle and House Speaker Ron Ryckman were appointed but have refused to serve. They are upset that Kelly earlier this year vetoed their pet bills loaded with tax breaks for businesses, especially those which make money overseas and return it to the U.S.
The Council, with or without the petulant Wagle and Ryckman, will march into the jungle growth of state tax policy and navigate its thickets of politics and fine print in search of resolution.
Meanwhile, remember two things. First, that the Legislature and the governor must agree to any reforms; second, that most Kansans will react to struggles with taxes the same way: Impose taxes so Someone Else pays them.
The Someone Else philosophy has been at the center of tax politics for more than a century. It even became law during the Brownback-Colyer administration. Taxes were imposed, Someone Else paid handsomely and, it turned out, so disproportionally that the state nearly went broke.
Any fresh looks by the Council will eventually turn to the property tax. This levy, a relic of the Pony Express days, is rarely fair. In spite of Gov. John Carlin’s successful initiatives for classification and reappraisal, property values remain difficult to assess uniformly.
The property tax is expensive to collect. It has scant relation to income produced; it often has a negative social impact because property that is poorly used is usually taxed less. In a twisted sort of way, the inefficient and those without enterprise get the rewards.
The property tax would have greater validity if it were used in relation to property and not to people. That is, taxes on farm land property might be used to pay for rural roads and bridges, rural fire and water systems, the sheriff patrol and the like. In the towns, property taxes might well finance non-arterial streets, fire departments, storm sewers, parking and more.
Taxes for people functions are another matter. These should be derived from incomes, sales and user fees, collected chiefly on a statewide basis.
The cost of public schools, for example, should relate not to the value of property in a district but to the number of pupils to be educated; this is a footing of current law, but not all of it.
A state-run and state-financed educational system is logical if not popular. Indeed, social services and welfare, and public health programs had better be on a federal rather than a state basis, considering how transient our population has become.
These ideas can run contrary to the notion that local control is better. Sometimes it is. Federal and state programs can develop costly and troublesome bureaucracies. Friends and neighbors understand better the local situations, but today’s friends and neighbors are no longer apt to be tomorrow’s. And the price of local control is often inequitable and discriminatory taxation – with equally onerous and unfair results.
In early 1991, fresh from her election and inauguration, Gov. Joan Finney marched unannounced into a meeting of the House Tax Committee and dropped a four-inch thick document on a table in front of the chairman. It was a listing of the state’s tax exemptions, loopholes and abatements. Here’s one place to begin, she said, and left the room. The file, like others, quickly gathered dust.
We don’t have another 30 years to fix this.