Revenue Secretary Joan Wagnon urged the Senate Ways
and Means Committee to look at ways to broaden the
tax base by eliminating sales tax exemptions that she
said had been unfairly applied over the years.
(Photo by Mike Shields)
TOPEKA — After weeks of talking about weak revenues and budget cuts, the Legislature this week takes up various tax proposals ranging from elimination of sales tax exemptions to a new levy on soda pop and other sugared drinks.
The full House on Tuesday is scheduled to debate House Bill 2549, which would generate about $127 million in new revenues by eliminating various sales tax exemptions, most notably the one that exists for the purchase of residential utilities such as electricity and gas.
It is viewed as a test vote on how much support exists in the House for raising taxes.
House Republican leaders have continued to say that the budget problem is caused by overspending not too little revenue. Senate GOP leaders and Democratic Gov. Mark Parkinson have called for $300 million to $400 million in additional taxes to prevent deeper cuts to schools, social services and public safety programs.
The Senate Ways and Means Committee on Monday launched the first of two days of hearings on Senate Bill 476, which would generate about $168 million, mostly through eliminating the state exemption for residential utilities.
"There has literally been an explosion of new sales tax exemptions in recent decades, some of them very significant in size," said Revenue Secretary Joan Wagnon.
Wagnon said the number of exemptions between 1985 and 2009 had tripled and that the estimated value of "foregone revenue" went from $3 billion in 2003 to $4.2 billion in 2009.
SB 476 also would remove exemptions created for churches and a variety of non-profit groups and charities, including the YMCA and the Girl Scouts. The bill would leave an exemption intact for fundraising sales by charities, which would keep Girl Scout cookies safe from tax collectors, but the number of days per year in which the sales could be held would be limited.
Bill supporters include the Kansas Association of School Boards and the teachers' union. It also has backing from social service agencies. Spokesmen said their support for a tax increase wasn't specific to the bill, however. They would back any tax increase legislators could agree to in order to protect their programs from further budget cutting.
Opposition came from the Girls Scouts, churches and owners of coin-operated laundries.
Churches got their sales tax exemption 11 years ago and lobbyist Dennis Wilson told the committee that the argument for continuing the exemption "was as strong today as it was 11 years ago."
Wilson said churches wouldn't be able to provide as much help to the poor and other distressed persons, if they had to pay sales tax.
Richard Martin, speaking for the Mo-Kan Laundry Association, said most of the people who use coin laundries are low income and that removing the exemption would be a "blatant tax on the poor."
"We live in a civilized society and everybody is expected to have clean clothes," he said. "Laundry is not a luxury, it's a basic of life. How can we fix this problem? Look to the people with expendable income, people who buy cigarettes and go to the casinos, and tax the devil out of them."
More than a dozen opponents offered written testimony and more are scheduled to testify Tuesday.
Also on Monday, in the Senate Assessment and Taxation Committee, Chairman Les Donovan, R-Wichita, unveiled his plan for raising about $340 million, relying on a mix of tobacco, alcohol, soda pop and general sales tax increases.
His committee will hold hearings this week on proposals to put a new tax on soda pop and will also consider a bill that would increase taxes on alcoholic beverages.