Senator Tom Holland, Senate Democrat and Minority Whip held a seminar for Kansas residents detailing the problems with Governor Sam Brownback’s plans to eventually discard the state income tax. The event, held at the Capitol Savings Conference room on the campus of the Johnson County Community College by approximately 200 people Tuesday evening at 7pm February 5th.
Holland is very concerned about the Governors assertion that Supply Side cuts are going to work in favor of the tax revenue base. “Brownback’s “Guiding Principles of Reforms” have significant flaws,” Holland stated and showed in a 45-minute presentation where his concerns are justified.
Holland takes exception to Brownback’s use of averaging out the top 9-states that have done away with their states income tax to show the success that all of these states have had. Several states have shown dramatic growth that props up the other states. As an example he shows that Alaska has had great revenue growth in their state, despite having no state income tax. He points out that most of their revenue growth has nothing to do with their lack of a state income tax, but the presence of oil and gas severance taxes that are applied when fracking or extracting those minerals. That is where their revenue growth has occurred. He points out that there are only 770,000 people in the state of Alaska.
Holland said that two of the largest states without a state income tax Florida and Texas have other resources to lean on for revenue growth. Texas has large oil and gas resources as well as hundreds of miles of shoreline that attract tourism and retirees moving into the area. Did you know that Houston is the largest shipping port in America? In addition much of their population growth can be credited to the fact that 38 percent of their population is Hispanic, a very fast growing segment of their population.
Florida, you might say has the obvious advantages over Kansas. It’s called shoreline and lots of it. The shoreline is one of the reasons that Florida is one of the highest tourism states in America.
Holland was insistent that Governor Brownback should not be telling Kansans that they should aspire to be a Texas, a Florida or even an Alaska, it is not possible. Kansas doesn’t have the alternative tax resources to copy these states. Right now the personal income tax represents half of the Kansas state budget. Under Brownback’s plan we will reach deficits almost immediately that will require either new revenue sources or cutting services already in the budget. The state does not allow the government to operate with a deficit; you have to balance the budget.
What does that mean for the budget? A large part of the budget, 88 percent, covers education and health care. The Governor said he is not going to touch those. So where does that money come from. This math does not add up and if you live in Kansas you better start doing your homework.