Brownback: Dems' unease over taxes a 'scare tactic'

10/15/2012

By DION LEFLER and BRENT WISTROM

By DION LEFLER and BRENT WISTROM

The Wichita Eagle

(MCT) — Gov. Sam Brownback on Friday called Democrats' concerns about property taxes a Halloween scare tactic and said his administration won't raise state property taxes to offset impacts from his income tax cuts.

"We're not going to raise property taxes, and we're not going to push property tax raises down on people," Brownback said. "This is a pure scare tactic.

"It's close to two things right now — an election and Halloween."

Brownback, who has staked his and the state's future on income tax cuts, said his plan will spur more economic growth and jobs than property tax cuts would.

"The best thing we can do for local education is getting the economy growing so you don't lose your property valuation, but your property valuation stabilizes and goes up, which is what supports a lot of local funding," Brownback said.

Brownback made his remarks in a speech to the Republican Pachyderm Club in downtown Wichita.

Speaking directly to Democrats, he added: "A part of me also says if you're so concerned about that then put on a proposal here for something we can do to drop property taxes at the local level instead of just using this scare tactic."

In their weekly news conference in Topeka, Democratic legislative leaders replied that they had done exactly that and been rebuffed by Brownback and the Republican-dominated Legislature.

In January — the day before Brownback unveiled his income-tax plan — Democratic lawmakers floated a proposal to send half of the state's surplus revenue to local governments to buy down residents' property taxes. The other half would have gone to schools under the Democrats' proposal.

That proposal was rejected in a House vote mostly along party lines.

"It was just put on the shelf by Republicans because their special-interest friends wanted this massive income tax cut," said House Minority Leader Paul Davis, D-Lawrence. "If he (Brownback) thinks the talk about property tax increases are a scare tactic, he is absolutely not in touch with what Kansas taxpayers are thinking. People are angry about property taxes."

Senate Minority Leader Anthony Hensley, D-Topeka, said the governor's school finance plan removed the cap on how much local school districts can increase their local option budget — a property tax increase that local voters can pass to supplement funding for their own schools.

Hensley said that is essentially an invitation to rich districts to hike property taxes to keep high-quality schools for themselves, while property-poor districts suffer declines.

"That's not a scare tactic, that's exactly what his plan proposes to do," he said.

Brownback's plan

The bulk of Brownback's speech in Wichita was a chalk-talk outline of the tax law that he and the Legislature did approve, which is concentrated on income-tax cuts on business and investment income.

The key feature of Brownback's plan is to eliminate state income taxes on income from limited liability companies, farms, sole proprietorships and corporations organized under Subchapter S of the federal tax code.

The governor said he thinks that will create more jobs by giving business people, especially owners of small business, more money to invest in starting and expanding companies.

Brownback presented a series of slides that showed population declining in Kansas as government spending increased since the 1970s.

In 1970, Kansas was the 28th most populous state in the country. Now, the state ranks 33rd and is expected to drop to 35th by 2020.

"It is factually accurate, but I do not accept this slide," Brownback said. "I do not accept that line. We are not cast in concrete that we have to drop from the 33rd most populous to the 35th most populous.

"But if we stay with doing what we're doing right now and we don't break our trend line, that's where we're headed ... and I've got 30 years of data to show you that the trend line we've been on has not been a good trend line and we need to get off of this trend line and get on a growth trend line."

One of Brownback's slides showed that Kansas was losing residents to Texas — which doesn't have a state income tax — and gaining population, albeit a smaller amount, from the higher-tax state of California.

Another slide the governor displayed showed that under his plan, state revenue will decline for the next two years until growth attributable to the tax cuts kicks in.

"Projections, which we think are solid, still have us above where we were in 2010, before we start growing again in receipts to the state," Brownback said. "And it will be a much more sustainable growth because it's going to be based on the lower taxes."

But while Brownback remains optimistic, he acknowledged another period of recession like the one that began in late 2008 could derail the plan.

"These are models, I want to emphasize that again, if we go into a second-dip recession, all this stuff's off," he said. "None of this stuff works if we're in a second-dip recession."

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