Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — Gov. Mark Parkinson says he is ready to push for tax increases instead of continued budget cuts to core state services.

But that will be a hard thing to sell to many Kansas legislators. At least seven of 40 senators and 18 of 125 House members have signed no-new-tax pledges and some who have not signed the pledge are running for higher office.

Americans for Prosperity, perhaps the state’s leading anti-tax group, is trying to get more lawmakers to sign their no-new-tax pledge.

“We hope to be adding some more folks next month,” said Americans for Prosperity-Kansas Executive Director Derrick Sontag.

More revenue

The governor has said the state has already cut to the bone and now needs to increase revenues to help solve the budget crisis.

The state is expected to be at least $300 million in the red in fiscal 2011, which begins July 1, 2020, if it doesn’t further cut spending or increase dollars to the treasury.

Sontag said the budget woes were due to overspending, not a shortage of revenue.

“If you go to fiscal year 2009 and look back five years, you’ll see that receipts went up 23 percent. That’s a dramatic increase, that’s pretty good in terms of money coming in,” Sontag said. “The problem is that during the same period you had a 40 percent increase in expenditures.”

That disparity, he said, has proven to be unsustainable.

“It’s the Legislature’s spending patterns that are the problem,” he said. “The taxpayers should not be asked to come pay for it.”

Parkinson told KHI News Service last week that he will push for a bigger tobacco tax to raise about $50 million. The last time the state increased the tobacco tax was 2002. The current tax is 79 cents per pack versus the national average of $1.37 per pack.

But Sontag said he believed increasing the tobacco tax would decrease sales and lead to less tobacco revenue for the state.

Tobacco-control advocates said Sontag’s contention might be true over time, but that they don’t see how reduced consumption could be viewed as a bad thing, given the health benefits. They also said the 2002 tax increase was still producing more money than the state would have received without it.

"I guess it depends on how you want to look at it," said Mary Jayne Hellebust, executive director of the Tobacco Free Kansas Coalition."It is true that tobacco use, over time, goes down, particularly when significant tax increases are adopted, and that revenues, over time, will gradually decrease. But it's also true that the 2002 cigarette tax increase is still providing more than double the revenue the state received prior to the increase."

Why spending went up

State Budget Director Duane Goossen said the spending increases pre-2009 driven by more people becoming eligible for Medicaid and a legal challenge to the state’s school finance formula that prompted major increases in K-12 spending.

“The Medicaid spending is driven by entitlements, we don’t have much choice there,” Goossen said. “The school-finance settlement was an out-of-court agreement reached by the Legislature and the governor that has yet to be fulfilled.”

School districts are now positioning for a return to court given recent cuts in state education aid.

State spending was cut roughly $340 million in fiscal 2009, which ended June 30, 2009. In fiscal 2010, spending has been cut by about $600 million.

“That’s a lot,” Goossen said.

‘Potentially crippling’

The governor said those cuts of the past two years have been “potentially crippling.”

In addition to a tobacco-tax increase, he said he’s also ready to endorse a nursing home bed tax to help draw down additional federal aid and he is willing to consider closing sales tax exemptions or increasing general sales or income taxes.

“We’re looking at all those possibilities,” Parkinson told KHI News Service.

Signed the pledge

Among the legislators who have signed a pledge against new taxes is Rep. Richard Carlson, chairman of the House Taxation Committee.

Attempts to reach him for comment were unsuccessful.

Some who have signed the pledge have shown no interest in reneging on it.

Rep. Owen Donohoe, R-Shawnee, serves on the House Appropriations Committee. He signed the pledge.

“Personally and only speaking for myself, I believe the money’s there and we shouldn’t have to raise taxes,” Donohoe said.

Social services, he said, have been cut enough, but schools and state employees have not.

Donohoe said he’s not convinced that school districts don’t have enough money in their reserve funds to weather the current financial storm.

“We’re told, ‘Oh, those are contingency funds, we shouldn’t be spending them,’” he said. “Well, if this isn’t a contingency that we’re in now, what is?”

Despite his opposition, Donohoe said he expects the Legislature will increase some taxes this coming session.

“I think the governor has us in such a deep hole, there’s nothing else the Legislature can do — and I think that’s by design,” he said. “But I won’t vote for it, absolutely not. I’ll fight it tooth and nail.”

Others not so sure

Rep. Dale Swenson, D-Wichita, signed the pledge last year. At the time, he was a Republican. He switched parties shortly after the start of the 2009 legislative session.

He said he probably won’t sign the pledge this year.

“Look, I don’t get much pleasure out of raising taxes,” Swenson said. “But when I look at this, I see all these tax exemptions and abatements that were supposed to be a good deal for the taxpayer. My question, I guess, is when is that ‘good’ supposed to trickle down to the taxpayers in my district because, so far, it always seems to be someone else. By that I mean the special interests.”

Swenson, a laid-off aircraft worker, said his district in southwest Wichita is “very blue-collar.”

“Maybe, what we ought to have is some accountability?” he said. “Maybe we should be looking to see if all the different exemptions have done what they were supposed to do?”

Swenson said he doubts a tax increase will be passed.

“At this point, of course, there’s no way to know. It’s too early,” he said. “But I don’t see the Republicans voting for it, and I don’t see the Democrats proposing it. We’ll just have to wait and see.”

-Dave Ranney is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at dranney@khi.org or at 785-233-5443, ext. 128.