Bevy of challenges await lawmakers

As a farmer, Rep. Kent Thompson’s heart and mind are imbedded in agriculture, which gives him fits of anxiety when mention is made of dealing with next fiscal year’s budget shortfall on the backs of farmers.
Rural interests are in the minority in both the House and Senate these days, and Thompson fears the “big city” crowd will look to raising revenue through new and higher agricultural land appraisals. He also worries a sales tax on purchases of farm equipment will be restored.
Either could be devastating, Thompson said.
“The way grain prices are (depressed compared to previous years), farmers are going to be facing some of their tightest margins in years,” he said.
Adding sales tax to equipment could lead to Kansas retailers closing their doors, he added.
“When you buy a new combine and a tractor, you can get it just as easily across the state line” without sales tax, Thompson said. And why not. Coupled with sales tax, the cost for those two pieces of equipment, $600,000 or more, would increase by about $50,000.

WHAT LEGISLATORS will face when they return to work Wednesday is a revenue deficit of about $400 million for fiscal year 2016, which starts on July 1. They also will have to rectify a shortfall of about $88 million for fiscal year 2015, ending two months hence.
Things didn’t look nearly that distressing until new revenue estimates were announced Monday.
Now, they have no choice but to raise revenue because the state’s cash-basis law requires revenue to meet expenditures. There’s no deficit spending in Kansas.
“The budget already has been cut all it can be, there isn’t a bit left without cutting into the bone,” Thompson said. “What I’d like to see is some leadership out of the governor’s office, something that is good policy for Kansas.”
Meanwhile, he said “everything is being mentioned,” as for ways to raise additional revenue.
Gov. Sam Brownback said Tuesday morning in Chanute he would hold education funding, already cut so much that some districts are laying off personnel and ending school several days early.
Thompson is convinced raising additional revenue is the only resort — and the only means is tax revenue. Reserves already have been spent down and the state’s favorite cash cow, Department of Transportation coffers, has been stripped as clean as it can be without shutting down operations.
Education and Medicaid account for about 70 percent of general fund spending — and Medicaid spending, such as it is without with federally promised funding refused by Kansas, “is locked in, we have to fund it,” Thompson said.
Whatever decisions are made will be excruciating, Thompson said.
Increasing alcohol and tobacco taxes have been mentioned since early in the session, but Thompson said neither “has momentum.”
He also frets if that approach were to find favor, sales would tail off, particularly in heavily populated Johnson and Wyandotte counties where residents are a short drive away from cheaper tobacco and booze in Missouri. Overall that might lead to a wash — or less — in tax collections, with lower sales.
The two tax increases that may find traction, he said, are sales and fuel.
Thompson regarded a half-cent sales tax increase as relatively painless on anything but major purchases, and with fuel prices the lowest they’ve been in years a tax increase there of 5 cents wouldn’t draw much ire of consumers.
The real sin, Thompson said, is the disparity that has resulted from the income tax cuts of two years ago.
The rich are benefiting in spades, he said, while the “hourly guy hasn’t seen much difference.”
He cited an example of what the income tax cuts meant, passed on the failed promise of spurring business and industrial growth by putting more money in the hands of job-creators.
“A farmer told me he paid $20,000 in federal income taxes, but just $200 to the state,” Thompson said. “Is that fair?”