As Kansas struggles to balance its budget, many lawmakers are showing they understand the solution does not lie in increased taxation.
Rebuffing tax increases, the Kansas Senate tax committee yesterday refused to introduce Governor Parkinson’s proposed tax hikes. As discussed earlier this week, Kansas Governor Parkinson seeks a 55 cent per pack tax increase on cigarettes and a 1 percent hike in the sales tax. These taxes will take an estimated $378 million out of the pockets of the increasingly tax-burdened Kansans.
The proposed tax increases would lead to a competitive disadvantage for Kansas’s business community. Surrounded by states with cheaper sales tax rates, it is likely many businesses will defect to neighboring states in pursuit of greater profit margins. Needless to say, lost business is not the solution to the Kansan budget deficit.
Ironically, Parkinson’s proposed cigarette taxes will produce the opposite of their intended effect. Whereas Parkinson hopes to substantially add to the state coffers, higher cigarette prices will increase the volume of smuggled contraband cigarettes and decrease the quantity of legally obtained cigarettes. This means less tax revenue for state programs operating on dwindling funding.
Typically lawmakers agree to introduce legislation on behalf of a sitting governor as a courtesy if nothing else. While legislation that will undoubtedly be voted down is almost always introduced, this time the tax committee has made a powerful statement with its decision. Kansas Senate Majority Leader Derek Schmidt, a member of the tax committee, said, "I can’t remember a time that the governor of Kansas has brought a request for a bill and that request was denied." Such a rare rejection shows many Kansan lawmakers’ refusal to subject taxpayers and businesses to the burden of additional taxes in a time when taxes should be cut.
Governor Parkinson’s tax increases are weakened but not defeated. It remains a distinct possibility that the Kansas Senate will eventually introduce the proposed legislation, if only to prove a point when it is defeated in a vote. Accordingly ATR asks all Taxpayer Protection Pledge signers to stand in opposition to these tax increases. For a list of Kansas Pledge signers, click here.
Click here to see ATR’s press release opposing the Governor’s proposal.