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Editorial: State Government Bank Balance More Important Than Yours

Posted 2/23/2017

ROBB ReevesROBB ReevesBy Robb Reeves

The state government in Topeka has run out of our money.

The solution: Take more from us.

The Kansas House and Senate voted to take have more taken from our paychecks, and to sternly tax Kansas businesses, amid a freak-out in Topeka about wanting more money to spend this year and next. As of this writing, only Gov. Sam Brownback could keep this tax increase from happening and there probably isn’t much resistance left there.

This one is going to be a roller coaster column and it’s long. But I guarantee if you read it, you will learn things you didn’t know. This tax increase is like packing another load of bricks on a struggling cart powered by a burrow trying to reach the stars.

So I read a story in the Wichita Eagle last week about the tax increases and the reporter fails to include the most basic of information – is the state bringing in more or less than it did last year? Is state revenue trending up or down? Wouldn’t you want to have that info? Here is what the general fund revenue looks like:

2014: $5.65 billion

2015: $5.92 billion

2016: $6.07 billion

It’s going up. I called and e-mailed the state to get this info. The man I dealt with was nice and helpful. So the state government is bringing in more and more annually but it’s not enough? Says who? This is a major point that is kept hidden in the dark. The media doesn’t report it. If I go out and ask people if the state is bringing in more or less money than it did last year, everyone is going to say less because they lack the facts.

Why do they lack facts?

Prediction: The Eagle Ivory Tower will print up a decree saying the tax increase is much-needed yet sadly, wasn’t enough. You watch.

How do Republicans vote for big tax increases and increasing government? They listen to two voices that cry out louder, longer and more often than you can – the Kansas state media and the school lobby.

Combined, they are a thunder-and-lightning megaphone that tells everyone the schools will close if taxes aren’t raised, right now. You have people in a panic about the schools and the media delivers story after story on the doom coming.

I am cleaning the office Sunday and I find a copy of last year’s Independent and we have a story where we were asking local school officials if the schools would close. Last year people were saying they would close in June of 2016. Did they?

State Senator Carolyn McGinn and our state representative, Don Schroeder, voted for the increase. I don’t know McGinn and Schroeder’s inner thinking. I agree with them on many issues. But the safe thing to do, if you are them, is to hike taxes. Most people believe the state is taking in less money than it has in the past and the schools will close if you don’t vote in more taxes. You actually look like a hero for doing it.

Those supporting the tax increase can make you look like a savior if you vote it in and like a jerk if you don’t. I criticized the Eagle earlier but I must bow to them on framing the issue and scaring the politicians. Well done.

I did ask McGinn and Schroeder specifically if they voted to re-instate state income taxes on Harvey County businesses. Here is the answer I got from Schroeder: “Robb, I voted for the tax plan that removes the LLC exemption.” That is as straight up as it can be.

Here is the answer I got from McGinn. “No, I voted for an adjustment to the 2012 tax plan 2178.” I am not sure what that means but the 2178 “adjustment” that was voted on last Friday includes tax increases.

Her column appears in today’s newspaper.

After all of this, a Democrat, Jeff Long of Emporia, comes out and said this was a great option to prevent cuts to the state retirement plan. So I have to work more and pay more to support the state retirement plan?

What about my retirement plan and that of my employees? I now have less money to put in my IRA. Will I get to retire? Jeff Long doesn’t care about the other people, just the state workers.

Whenever government takes money from someone and gives it to another, someone loses. You could make a case – and boy it was made, too – that when the businesses in the state got a tax break a few years ago, then money was taken from Big School and they lost.

So now we are taking money back from the businesses. Won’t they be hurt? They will, but the media won’t cover it like they did when schools lost funding.

A few weeks ago, I suggested to McGinn and Schroeder to find a way to collect sales tax on internet sales. Even the liberal Lawrence Journal-World asked these people in Topeka to do this and I don’t think it was even discussed.

Instead, McGinn and Schroeder voted to remove the LLC tax exemption, which means Kansas businesses will pay around $250 million more in new taxes now. So we increase taxes for Main Street businesses and let out-of-state companies lengthen their advantage over our local companies. What are we doing?

I said you would learn things in this column.

The state also recently increased the unemployment taxes that businesses pay. These taxes are paid whether a business makes a profit or not. Why did we do that when unemployment is so low?

Repealing the LLC tax break was taking away the only incentive most small businesses have ever seen from Kansas government. Crop prices are underwater and we are raising taxes on people and businesses. Also the state increased the sales tax in 2015. Remember that one? And the beast is still starving.

Did you see where 800 small farms were lost in 2016? Gone, closed. Business can and will disappear if conditions aren’t right. But man, those state retirement plans look good ­– for the moment.

There is room in Kansas right now for some type of populist movement. We need something different from the moderate Republicans and Democrats who put government first. Yet this new movement should not be aligned with the flame-throwing conservatives who send out the nasty mailers every election.

I also think there is an opportunity in Kansas media to challenge the liberal think that dominates print and web.

That is something I have thought about a lot lately.

One last thing, Harvey County. The county commission has raised property taxes mightily and steadily since 2011, exasperating the situation locally. The reasons for this, when I have asked why, are to pay for the industrial park in Newton, to pay for roads, and to make up for funds the state no longer sends. Well, the state just did a massive tax increase.

If there is a Harvey County mill levy increase this summer, there are going to be people at the budget hearings and they will be informed. That’s what I am hearing.

It’s not going to be like in years past.