Early yesterday morning the Kansas House of Representatives voted to join the Kansas Senate in passing a $314 million tax increase on Kansans in FY2011 alone. Last week, the Senate passed this tax increase and this week the House passed the same tax increase package in order to fund their out of balance budget. The revenue being pulled from the private sector over the next 5 years is estimated to cost taxpayers $1.51 billion in sales tax dollars. The budget that was passed is going to spend an estimated $195 million more than was spent in FY2010. With their constituents facing a recession legislators chose to take more in tax dollars so that they could spend more. The budget and accompanying tax increase will now go to Governor Parkinson who will sign both of them.
The House voted 64-61 to pass the tax increase with the Senate voting 23-17 for the tax increase. All of the Taxpayer Protection Pledge signers held the line and voted against the tax increase except two: Dale Swenson (D-House 97) and Jo Ann Pottorf (R-House 83). Both of them broke their commitment to the people of their district and the state of Kansas to "oppose and vote against any and all efforts to increase taxes." In the end there betrayal of the taxpayers were the deciding votes that saddled the taxpayers with a rising tax burden.
This new tax increase (the second largest in KS history) will not only hurt consumers who are struggling, retailers will feel the pain too. Kansas' tax rate will increase from 5.3 to 6.3 percent starting July 1. On July 1 of 2013 the sales tax is scheduled to be reduced to 5.7%, but even with this reduction Kansas will have the highest sales tax in the region. The sales tax rates of the surrounding states are: Nebraska 5.5%, Oklahoma 4.5%, Missouri 4.225%, and Colorado at 2.9%. With a large portion of the Kansas population near the Kansas-Missouri border in particular, not only will this be giving many consumers more of a reason to buy products in Missouri, but it will be hurting businesses that will be left behind as consumers buy elsewhere.
See ATR's letter opposing tax increases as a budget fix in Kansas, click here.