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AP: Governor Parkinson, top GOP senators push tax increases

Published 3/6/2010 in Local News

TOPEKA (AP) — Democratic Gov. Mark Parkinson called for reviving Kansas' estate tax and ending "special interest" breaks after key Republican senators said they'll push for $300 million in tax increases to help erase a budget shortfall.

Senate President Steve Morris and Vice President John Vratil said the chamber is working on a plan to raise sales, tobacco and alcohol excise tax rates and eliminate sales tax exemptions. Both GOP leaders also said they're looking to trim spending from Parkinson's budget proposals for the fiscal year that begins July 1.

Parkinson told reporters that he'd accept their tax proposals because he sees them as better than deep cuts in education, social services and public safety budgets. But he said legislators should reinstate Kansas' now-repealed estate tax and reverse past business tax breaks.

The governor also announced proposals for keeping the state's current budget balanced through the end of June. His plans include canceling highway maintenance projects and strengthening the state's seat belt law to attract extra federal funds.

But Parkinson's news conference was more noteworthy for his populist criticism of legislators for a tax-cutting "binge" over the past two decades. He said waves of tax breaks depleted resources for schools and state programs but provided "virtually nothing" for ordinary Kansans.

"It's all been given away to special interest groups," Parkinson said. "If we're going to solve this problem for the long-term, we have got to undo some of the very poor public policy decisions that we've made."

But tax increases remain a hard sell to the Republican-controlled Legislature. House GOP leaders are adamantly opposed to any increases and say past tax breaks stimulated economic activity.

Mike Maddox, chairman of the Kansas Chamber of Commerce's board, labeled Parkinson's comments "unconscionable" and "ridiculous." Maddox said higher taxes would drive businesses out of the state.

"We do not have a tax-cut problem. We have a spending problem," Maddox said. "Raising taxes in a down economy will only further jeopardize Kansas jobs."

The state went through five rounds of spending cuts and other adjustments last year to keep its current budget balanced through June 30. But tax revenues in February fell short of expectations, opening up a $88 million gap.

Parkinson's plan addresses that short-term shortfall with a half-dozen adjustments, the biggest being the cancellation of highway maintenance projects to save $28 million. But there are no further cuts in aid to public schools or social services.

He said a tougher seat belt law would attract $10 million in federal funds for the budget. The key change would allow law enforcement officers to stop vehicles if someone inside isn't buckled up, rather than requiring officers to have another reason first, such as speeding. A bill passed the Senate and is before the House.

Parkinson and legislators also must close a projected $467 million shortfall in the budget for the fiscal year beginning July 1 and that's why Morris, a Hugoton Republican, and Vratil, a Leawood Republican, said they're looking to raise taxes by $300 million.

Morris and Vratil said they don't believe the state can cut enough spending to eliminate the shortfall.

But their tax target stunned some fellow Republicans. Upon hearing the $300 million figure, House Appropriations Committee Chairman Kevin Yoder, an Overland Park Republican, said, "Wow!"

"Are you serious?" he asked. "Raising those types of taxes at this time would make it harder on families and small businesses and frankly prolong the recession."

Even Democratic leaders, who don't want more spending cuts, were wary of the Senate GOP's target. They said they hope the federal government will funnel additional dollars to states this year, lessening the need for tax increases.

"Frankly, it's probably a little premature," House Minority Leader Paul Davis, a Lawrence Democrat, said of the proposed tax hikes.

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