Kansas Economic Conference: Brownback's State Income Tax Cuts Put Pressure on Local Communities

Nov 17, 2013

Gov. Sam Brownback, seated right, attended a recent business conference in Overland Park to describe the benefits of the tax cuts he signed into law in May. At the podium is Gary Allerheiligen, former president of the Kansas Society of CPAs. The law, which becomes effective for tax year 2013, is expected to eliminate income tax liability for about 190,000 business owners and reduce the state income tax obligations of more than 1 million Kansas filers.
Gov. Sam Brownback, seated right, attended a recent business conference in Overland Park to describe the benefits of the tax cuts he signed into law in May. At the podium is Gary Allerheiligen, former president of the Kansas Society of CPAs. The law, which becomes effective for tax year 2013, is expected to eliminate income tax liability for about 190,000 business owners and reduce the state income tax obligations of more than 1 million Kansas filers.
Credit Mike Shields

The Kansas Economic Policy Conference was recently held in Lawrence.  Conference officials said they had record turnout with about 140 people, including about a dozen legislators, attending in Lawrence and 15 participating from Ulysses via a live video feed reported the Kansas Health Institute.

The focus of the conference — titled "The Kansas Fiscal Experiment: Impact on Communities" — was on the sweeping tax cuts implemented by the Republican-dominated Legislature and Brownback. The governor has said he wants to completely eliminate the state's income tax as a way of promoting business growth and employment.

Brownback’s state income tax cuts are putting added pressure on already cash-strapped local governments, according to officials who were present.  They said the likely results are increases in local property and sales taxes to help offset losses in state aid. 

"This is not rocket science from my perspective: We have less money coming in from the feds, less money coming in from the state, more increased demand — where are property taxes going to go for local governments? Let's all say it together: Up," said Hannes Zacharias, county manager for Johnson County, which is the state's most heavily populated.

John Battin, mayor of Ulysses, said via video conference that while property values of farmland in his area have risen dramatically, the county's revenue from property taxes has remained flat.

Raising property taxes, he said, "could help a little bit."

Panelists and members of the audience repeatedly expressed concerns about inevitable debates over raising property taxes or cutting back on funding for schools, police, fire, emergency medical, and other public services.

Sen. Jim Denning, an Overland Park Republican was in the audience. He told KHI News Service that it wasn't clear to him whether raising property taxes was necessarily a bad thing.

"Is there really a difference between taking Johnson County's money and spreading it out to the state or keeping it in county? What's better? The argument of the state has been that it's better to spread Johnson County's money out west," Denning said.

"But the gentleman from Ulysess admitted — and I've heard it many times — that they're not taxing their most valuable asset (farm land) enough. So maybe that would equalize things. Start taxing their most valuable asset to pay some of the bills. But I just don't have my arms around that yet," he said.