By Mike Shields, KHI News Service, January 21, 2010
TOPEKA — Spokesmen for about a dozen school, union and social service groups urged members of the House Taxation Committee today to heed the governor’s call for a tax increase to help solve the state’s budget crisis.
"We are imploring you: No more cuts," said Mike Mathes, superintendent of the Seaman school district.
Mathes was one of several school officials from across the state who described closing buildings, cutting sports programs, bus routes, school days or employees to deal with earlier budget reductions.
More cuts would be too much to handle, they said.
State general fund spending has been reduced about $1 billion since lawmakers approved the fiscal 2009 budget and they are looking for ways to fill an estimated $400 million hole when they craft the 2011 budget in the weeks and months ahead.
Gov. Mark Parkinson has urged the Legislature to raise about $380 million by increasing the state sales tax a penny to 6.3 cents and the cigarette tax by 55 cents a pack to $1.34.
Restore services
Many who testified said they weren’t particular about what kind of tax gets passed so long as it increases state revenues to ward off continued or additional cuts to school and social service programs.
Carol Russell of Emporia said her 93-year-old mother learned right after Christmas that some of the home services she receives through the local Area Agency on Aging are no longer possible because of state budget cuts. Russell said she and her husband also have a daughter with “special needs” and that paying for her mother’s lost services would require more than a quarter of her annual earnings as a professor.
"A sales tax increase would help restore these needed services,” Russell said, “and assist agencies to serve those in need."
Opponents of House Bill 2475 are scheduled to testify Tuesday and legislators had no time for questions, so Thursday’s hearing was a succession of people describing the consequences of ongoing cuts to state programs.
Budget Director Duane Goossen told lawmakers that the tax increases proposed by the governor would allow a rollback of the 10 percent cut in rates paid to Medicaid providers, including doctors, hospitals, nursing homes and others. The Medicaid cuts became effective Jan. 1 and will fall hard on service providers such as Big Lakes Developmental Center in Manhattan.
Weaker local economy
Lori Feldkamp, chief executive of the non-profit agency that provides services to the developmentally disabled, said if the Medicaid cuts are not repealed her agency will lose $1 million a year or about 13 percent of the operating budget.
"Since the cuts were implemented by the Legislature in the 2009 session," she said, "Big Lakes has either reduced hours or eliminated 19 positions. More staffing cuts will be implemented if funding cuts are not restored. This will only lead to increasing unemployment. Our local community will lose the buying power of over a million dollars spent by our staff and clients, which results in lost tax revenue for the state."
Many who testified said a tax increase would help the economy or at least not hurt it.
Pat Hurley, of Economic Lifelines, a group that pushes for more road spending, said research showed that the last two major highway plans had been the biggest economic boons the state saw in the 1980s and 1990s and another highway plan also would boost job growth.
The governor has proposed that a portion of the sales tax increase be dedicated to highways.
"Overall, the tax burden in our state is not rising," said Mark Tallman, a lobbyist for the Kansas Association of School Boards. “We don’t believe a reasonable tax increase will harm the state economy.”
Tallman said he also believed there was strong public support for tax increases that help fund schools.
Put politics aside
Gary Brunk of Kansas Action for Children urged the panel to also consider options less regressive than a sales tax increase for raising revenues, including closing tax exemptions or “modernizing the income tax.”
He said the state should form a commission to find ways to bring the tax code, “into the 21st century.”
Tom Laing, executive director of Interhab, an association that represents most of the state’s providers of services for the developmentally disabled, urged the legislators to put aside politics.
"The most basic building block of tax policy in any government," he said, "is this simple value: Elected leaders must establish the means by which to pay the basic services of government. Unfortunately, that simple value has been abandoned too often in recent years during which tax politics replaced tax policy in both chambers. The result has been budget chaos and the result of this budget chaos is cruel."
Laing said there are now 4,300 developmentally disabled persons on a waiting list for services. He said recent cuts have reduced wages for those who provide direct services to the disabled to 1998 levels.
"Raise the taxes needed to keep our state a decent and caring place to live," he said.
For more on the Legislature's budget deliberations read: Morris: Fix to mix cuts, taxes.