Members of the Kansas House Tax Committee will hear a measure today to remove income tax exemptions that benefit LLCs and lower the state sales tax on food from 6.5 percent to 2.6 percent.
“It’s the right thing to do,” said Kent Thompson, 9th District representative. Even so, he also thinks it’s unlikely to pass, if it reaches the House floor for debate.
He estimated more than half the 330,000 Kansas businesses, including farms, that benefit most from the 2012 income tax cuts are LLCs. The import is that being a limited liability corporation shelters personal assets from taxation.
“There is no way to defend the 2012 tax cuts,” Thompson told the Register. “That’s why we are where we are,” with revenue 11 of the past 13 months failing to have met expectations and a budget that constantly has had expenditures cut to the detriment of schools, social programs and transportation.
A simple majority of the 17 committee members is needed to send the measure to the full House for debate.
Support for the measure could not be pinned down, Thompson said, adding that the state couldn’t afford either tax change in its present financial condition.
In February revenue totaled $54 million less than anticipated. An immediate step for correction, by Gov. Sam Brownback, was to cut funding for higher education by $17.4 million.
“To you and me, $54 million is a lot of money, but in a $16 billion budget it can be handled,” Thompson said, though not painlessly. “We’re walking a financial tightrope.”
School finance propositions have been introduced in both houses — for an increase in the House, a cut in the Senate — and Thompson doubts either, as posted, will make headway, “but I am glad something is on the table.”
ANOTHER BILL would have significant impact locally. The measure proposes to eliminate taxing authority for regional library systems, such as the Southeast Kansas Library System, of which Iola and others in the area are members. The alternative would be annual election to approve taxation on behalf of a regional system.
“I believe it’s highly likely that the majority of voters would automatically vote against the system budget, neither knowing nor caring what the implications are,” Roger Carswell said in an email.
He is director of the SEKLS and Iola library.
The bill HB 2719 will be debated in the House Tax Committee today.
Carswell pointed out the Iola library received $35,567 — one-sixth of its funding — from SEKLS. “Beyond that the library is reliant on many SEKLS services, including the SEKnFind catalog, continuing education, interlibrary loan and technology support.
