Governor announces plan to shore up the budget

While lambasting the Legislature for giving away the tax base to the "wealthy and well connected"

0 | Legislature

Gov. Mark Parkinson, a Democrat, went on the attack against the Republican-dominated Legislature, saying it had given away $9 billion in tax cuts since the mid 1990s mostly for the benefit of the "wealthy and well connected." Listening in the background are Rep. Eber Phelps, D-Hays, left, and Senate Minority Leader Anthony Hensley, D-Topeka.

Gov. Mark Parkinson, a Democrat, went on the attack against the Republican-dominated Legislature, saying it had given away $9 billion in tax cuts since the mid 1990s mostly for the benefit of the "wealthy and well connected." Listening in the background are Rep. Eber Phelps, D-Hays, left, and Senate Minority Leader Anthony Hensley, D-Topeka.

— Gov. Mark Parkinson got high marks from legislative leaders Friday for doing the “dirty work” of ordering yet another round of spending shifts and cuts to keep the state budget balanced.

But Parkinson returned no compliments Friday. Instead he took broad swipes at the Legislature in a press conference announcing his latest budget plan.

“Unfortunately, it’s not just the recession that’s put us in this situation,” Parkinson, a Democrat, said. “The Legislature has been on a tax cutting binge over the last 20 years. Special-interest groups have been rewarded time after time. Yet what have we done for the average person? Virtually nothing.”

Parkinson said the Republican-dominated Legislature had given away $9 billion in tax breaks or cuts since the mid 1990s, largely to benefit “a small number of wealthy, well connected people.”

“It’s time to stand up for the average Kansan,” he said. “We have to stop giving away the tax base.”

The governor at the beginning of the legislative session called for a 1 cent sales tax increase to close the anticipated $400 million budget hole in the fiscal year that begins July 1. He said it would be necessary to avoid deeper cuts to education, social services and public safety programs.

During questioning by reporters, the governor conceded a sales tax increase wasn’t the best policy for helping average Kansans.

“Even though in my view the sales tax isn’t the best approach,” he said. “I’m a realist…historically, it’s the only tax we’ve been able to pass.”

Parkinson said he would rather see the Legislature reinstate the estate and business franchise taxes it has reduced or eliminated and trim the list of sales tax exemptions it has added to over the years.

“But I don’t think they can do it,” he said.

An hour earlier, top Republican leaders in the Kansas Senate praised Parkinson for laying out a plan for dealing with the ongoing budget problems of the current fiscal year.

Seeing the landscape

”I really appreciate the governor being proactive on these budget issues,” said Senate Pres. Steve Morris, R-Hugoton. “He sees the landscape, he sees the picture, he sees what we’re up against. He tries to make rational decisions to deal with those issues . He could wait and let us do everything and force us to make tough decisions, but he’s been very good about taking the bull by the horns and doing what needs to be done.”

Morris and Senate Vice Pres. John Vratil, R-Leawood, repeated their call for a combination of tax increases and spending cuts to balance the fiscal 2011 budget.

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Senate Pres. Steve Morris, R-Hugoton, left, and Senate Vice Pres. John Vratil, R-Leawood, said $300 million in tax increases will be necessary.

Morris said state spending had been reduced about $1.3 billion the past two years and finding another $400 million or $500 million in cuts would be “just impossible.”

Instead, he called for a combination of tax increases, including on tobacco and alcohol sales, to raise about $300 million.

He said he wasn’t particular which taxes were raised, just so the Legislature gets the job done.

“I support us getting to $300 million,” he said. “I don’t know what combination (of taxes) that will be.”

"Trimming the fat"

House and Senate Democratic leaders also complimented the governor’s initiative.

“He’s doing the Legislature’s dirty work,” said House Minority Leader Paul Davis of Lawrence. “There are no good choices left. It’s just a series of bad ones left. He’s done the best he can – the responsible thing - to plug the revenue gap for 2010. I’m pleased he didn’t make further cuts to social services or education. He’s clearly committed to not doing that.”

The governor, Democratic leaders and even Republican leaders in the Senate have blasted House Republican leaders for continuing to insist that deeper spending cuts are the solution to the budget crisis instead of tax increases.

“We’re still receiving very little direction from House Republican leadership,” Davis said. “It appears they’re willing to abdicate their responsibility to govern.”

The House mostly took the day off Friday and House Republican leaders weren’t immediatley available to respond to the various criticisms. Spokesman Wade Hapgood said he was trying to get an approved statement or reaction from the GOP leaders who were out of the building before noon.

House Speaker Mike O'Neal later released a statement saying tax increases would hinder economic recovery.

"Instead of pursuing tax increases that will only lead to higher unemployment and prolong the recession, I would urge the governor and Senate leadership to do the hard but necessary work of trimming the fat out of the state budget," O'Neal said.

$85 million plan for 2010

The biggest spending cut ordered by the governor was $87 million for highway maintenance, of which $28 million had been planned for the current fiscal year.

He also placed a moratorium on payments into the fund that covers state employee death and disability benefits. Parkinson said that would save the state $12 million without harming the fund.

Another $15 million was recovered from the Temporary Assistance to Needy Families fund. Parkinson said extended unemployment benefits made fewer people elegible for the assistance, producing the savings.

He urged the House to pass a primary seat belt law, which would bring the state $10 million in federal aid. The Senate has already passed the bill. The House has resisted.

He also called on lawmakers to codify a recent change in the way the state assesses fees against the Medicaid program’s three managed care contractors, which would add $4 million to state coffers. That money already started coming in earlier this week.

Parkinson also noted an additional $16 million Kansas will get to keep as a result of the federal government temporarily reducing the “clawback” or share states must pay for prescription drug benefits for people who are dually eligible for Medicaid and Medicare.

The total enhancements, shifts and cuts in the governor’s plan for leaving the fiscal 2010 budget in balance totaled $85 million.





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