TOPEKA The chairman of the Senate Assessment and Taxation Committee on Monday proposed a four-fold plan for raising more than $340 million for the state treasury.
The plan includes raising the state sales tax by seven-tenths of a cent, increasing the state taxes on cigarettes, liquor, and sugar sweetened soft drinks. It also calls for dropping the state’s sales tax on food in two or three years.
“Raising taxes is not something we want to do,” said Sen. Les Donovan, R-Wichita. “If we thought there was another way to go, we would do that.”
Earlier this month, Senate leaders said that to balance the state’s budget legislators need to cut state spending by $100 million and, at the same time, raise more than $300 million in revenue.
Donovan said the revenue “target” is now “between $340 million and $350 million.”
Gov. Mark Parkinson also has called for tax increases of about $400 million to avert furthers cuts to schools, social services and public safety program. He called for 1 cent increase in the general sales tax and a 55 cent per pack increase in cigarette taxes.
The governor's plan would raise the state’s 5.3-cent sales tax to 6.3 cents for three years, after which it would be rolled back to 5.5 cents. The remaining two tenths of a cent would go to support highway building and maintenance.
Donovan’s plan calls for pushing the state sales tax to 6 cents and after three years eliminating the state sales tax on food. The 6-cent sales tax would not be rolled back.
Donovan defined food as “...what you buy at Dillon’s for home consumption,” and not “...what you go to Appleby’s and get served.”
Dropping the sales tax on food, he said, would save the state about $45 million on food sales tax rebates for low- and modest-income Kansans.
That $45 million, Donovan said, would be set aside for highways.
The food tax, he said, could be dropped in two instead of three years if the economy should “turn rosy and revenue comes rolling in in buckets.”
Pushing the state sales tax to 6 cents is expected to raise an additional $260 million.
Also in Donovan’s proposal:
• Raising the cigarette tax 25 cents per pack instead of Parkinson’s proposed 55 cents.
• Tax sugar in soft drinks and other sweetened beverages by seven-tenths-of-a-cent per teaspoon. The Senate Ways and Means Committee has proposed taxing sugar at 1 cent per teaspoon.
• Raising the state tax on liquor sales.
Donovan said he didn’t have an exact liquor-tax figure but predicted it would be “drastically changed, mostly downward,” from what others have proposed.
Afterward, Sen. Karin Brownlee, R- Olathe, said she would not support Donovan's plan.
“Private individuals and business cannot absorb a greater tax burden,” she said.
Sen. Julia Lynn, R-Olathe, said she also doubted the merits of a tax increase.
The Kansas Chamber of Commerce is expected to lobby against the package, calling, instead, for deeper cuts in spending.
“They (legislators) have held state government immune, pretty much, and not looked at anything , while the private sector has been doing layoffs for over two years,” said J. Kent Eckles, the state chamber’s vice president of government affairs. “They haven’t done any cutting, really. I mean, they’ve done some, but not what needs to be done.”
Others disagree, noting that revenue shortfalls have forced lawmakers to cut about $1.3 billion in spending over the past two years.
In other action Monday, the committee continued its hearing on the governor's sales tax proposal.
Three people testified against it. Supporters testifed last week.
Tom Palace, executive director of the Petroleum Marketers and Convenience Store Association of Kansas warned that Missouri convenience stores were "literally salivating" over the prospects of Kansas raising consumption taxes because of the business that would be driven their way.
The committee is scheduled to hold a hearing on the liquor tax on Tuesday and the soft drink tax on Wednesday.
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