State of Kansas Finances

[Aargh]

I'm aware of the tax increase but it wasn't so much an increase as a closing of loopholes for LLC's correct?

Also, is it not the legislature and the executives branch to balance the budget? They've done a piss poor job. I hope they realize that when student employees were furloughed this past summer that they alienated a huge amount of there future republican voting base.

Actually, the tax increase was an increase on sales taxes and cigarette taxes. There was absolutely no closing of the pass-through exemption.

Other tax increases included limiting or eliminating itemized deductions for medical and home owner interest payments. That created some pretty significant tax increases for mainly middle class taxpayers.

For those of us who've supported the state for 40+ years and are now on Social Security, our taxes have increased under the current tax policy in Kansas. I'm a bit pi$$ed that I have to pay more to the State so that people who make money off of investments (rents, royalties, dividends, etc - what I refer to as the investment class), those who are self-employed, attorneys (check out how much Brad Pistotnik makes by watching the ads with the million dollar payouts...I'm paying more so he gets a free ride?)...I'm paying more so those people get a free ride?

The Kansas Constitution requires the legislature to provide funds to balance the State's spending. Unfortunately, there are no penalties stated if they fail to do that. They failed to do that. It's not the legislature AND the executive branch - it's the legislature's repsonsibility.

In an election year, the legislature decided they didn't want to have any votes on record for balancing the budget that could be used against them in the elections. I would like to believe they would have the courage of their conviction that there is a spending problem, but they did not demonstrate that courage.

[shocker3]

Actually, the tax increase was an increase on sales taxes and cigarette taxes. There was absolutely no closing of the pass-through exemption.

Other tax increases included limiting or eliminating itemized deductions for medical and home owner interest payments. That created some pretty significant tax increases for mainly middle class taxpayers.

For those of us who've supported the state for 40+ years and are now on Social Security, our taxes have increased under the current tax policy in Kansas. I'm a bit pi$$ed that I have to pay more to the State so that people who make money off of investments (rents, royalties, dividends, etc - what I refer to as the investment class), those who are self-employed, attorneys (check out how much Brad Pistotnik makes by watching the ads with the million dollar payouts...I'm paying more so he gets a free ride?)...I'm paying more so those people get a free ride?

The Kansas Constitution requires the legislature to provide funds to balance the State's spending. Unfortunately, there are no penalties stated if they fail to do that. They failed to do that. It's not the legislature AND the executive branch - it's the legislature's repsonsibility.

In an election year, the legislature decided they didn't want to have any votes on record for balancing the budget that could be used against them in the elections. I would like to believe they would have the courage of their conviction that there is a spending problem, but they did not demonstrate that courage.

You pretty much hit the nail on the head. The tax increase last year upped the Sales Tax, Cigarette Tax, put a new tax on e-cigs, and eliminated most itemized deductions (a $97 million income tax increase on those who itemize). The total tax increase amounts to $400 million a year, making it the largest tax increase in Kansas History in actual dollars (in inflation adjusted dollars, the Mike Hayden tax increase in 1989 would be larger). The business income exemption remained intact except for a tax on guaranteed payments (something any good accountant could cause their client to avoid).

There was a conference committee report run on the next to last day of the session this year to make business owners pay the same income tax rates as everyone else. That bill failed in the Kansas House 45-75. The Senate never took the issue up.

[shocker3]

The tax increase was a sales tax on everyone. LLC owners continued not to pay. I really respect the city businesses who overwhelmingly (during a poll), said that they were willing to pay taxes to help the state. It was like 4 out of 5 business owners in Wichita who said they were willing to pay more because it wasn't fair that they didn't pay taxes but their workers did. I think that if jobs were being created from the lower taxes, people would feel differently but the data doesn't show that.

I was impressed by that too. The Wichita Independent Business Association even had their representatives in Topeka lobbying legislators to get rid of the tax break. Unfortunately the State Chamber which is a much bigger organization lobbied even harder to keep the tax exemption in place.

[RoyalShock]

Dept. of Rev was expecting there would be 190,000 taxpayers exempted under the pass-through exemption. That number has steadily grown to 330,000 as investors (who formerly had no corporate structure) became LLC's. more and more "employees" became "independent contractors", and accountants and lawyers found ways for taxpayers who weren't expected to be exempt to become exempt. There's also the moronic position I've heard from some legislators that they thought only profits, and not wages, of owners of small businesses would be exempt.

When you miss an estimate of the number of taxpayers exempted by something like 70%, estimates are going to be off.

Then the sales tax and cigarette tax increases cause those living close to borders to cross the state line to make purchases. There appears to have been a significant underestimate of how the increased sales tax rates would affect where purchases were made.

I know of people in Wichita who drive to Indian reservations in Oklahoma to buy cigarettes. They only buy something like 5 cartons at a time. Gas is cheaper there too, so they fill up. They say they save enough doing that to more than pay for the trip. While they're on the Reservation, they visit the Casino, eat some meals, do some shoppoing.

Governments are the WORST predictors of human behavior. And when they base financial decisions on those predictions, the outcome is not going to be good.

[wu_shizzle]

Governments are the WORST predictors of human behavior. And when they base financial decisions on those predictions, the outcome is not going to be good.

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." - FA Hayek

[_kai_]

When you have business owners, rental and royalty owners, not paying income tax, and then the elderly tax payer who is paying 100% of their income to support their end of life care, and they get hit with tax because medical deductions are disallowed in Kansas.... that's HORSE ****. To the legislators who voted to cut out medical deductions from taxes, please go talk to those taxpayers in their retirement home or in the hospital that you made pay tax. Go visit the home of the family that someone had catastrophic medical expenses due to cancer treatments, injury accidents, who now got hit with a tax because they can't deduct those medical costs to Kansas. It's real, it's happening, and it's a crime against society.

Medical deductions are already limited by how much you make, so the people utilizing medical deductions on their taxes are not "skirting the system." You have to have a pretty solid amount of your income going towards medical expenses to utilize them. It would seem inherent to me that those who utilize the deduction are in need, and in a bad spot. If you're spending 20,000 on medical expenses and make 50,000, you've had something pretty big happen to your health.

/rant

[engrshock]

You do not have a balanced budget if you are delaying payments to KPERS and borrowing money from the bank of the Dept. Of Transportation that will have to be paid back.
Gov. Brownback will be out of office and whoever becomes governor and legislators will have to find ways to make up all of this borrowed money (deficit).
I do not see many cuts (increases in efficiencies) that will be able to pay for the payments.
always thought Kansas had a balanced budget requirement but if that balanced budget is achieved by switching money around that
will have to be paid back in the future (sounds like deficit spending to me) then there is no difference between the Kansas budget system and the Federal budget.
We need to get back to revenues paying for the yearly expenses of government. If you cannot cut enough then you have to raise revenues.

[shocker3]

You do not have a balanced budget if you are delaying payments to KPERS and borrowing money from the bank of the Dept. Of Transportation that will have to be paid back.
Gov. Brownback will be out of office and whoever becomes governor and legislators will have to find ways to make up all of this borrowed money (deficit).
I do not see many cuts (increases in efficiencies) that will be able to pay for the payments.
always thought Kansas had a balanced budget requirement but if that balanced budget is achieved by switching money around that
will have to be paid back in the future (sounds like deficit spending to me) then there is no difference between the Kansas budget system and the Federal budget.
We need to get back to revenues paying for the yearly expenses of government. If you cannot cut enough then you have to raise revenues.

The Kansas Constitution requires a balanced budget and Kansas Law requires a 7.5% ending balance. The Budget passed this year as you pointed out isn't really balanced since it uses borrowed money and even with that borrowed money the ending balance is barely above 0, no where close to the 7.5% requirement. Bottom line, the biggest job of the Legislature each year is to pass a balanced budget. They failed miserably this year. They didn't even come close, and they haven't for a few years now.

[engrshock]

Who is responsible for having a balanced budget and what is the penalty for not approving and signing a balanced budget? I can see the problem being passed along until a new governor takes office and the budget mess will be more like an overwhelming crisis.

[shocka khan]

Brownback and the legislature are beginning to remind me of Bobby Jindal and Louisiana. Perhaps not as bad, but obvious he's leaving a **** hemmorrage of finances for the next guy to clean up.

[rrshock]

I would like to see the Republican divide come back to Kansas. In the 90's, there was a large group of moderate Republicans in Topeka. It seemed to me that more stuff got done because they worked with both sides, where as now the ultra conservative bunch steam rolls everyone else and isn't doing **** to help this state.

[wu_shizzle]

I would like to see the Republican divide come back to Kansas. In the 90's, there was a large group of moderate Republicans in Topeka. It seemed to me that more stuff got done because they worked with both sides, where as now the ultra conservative bunch steam rolls everyone else and isn't doing **** to help this state.

There are still more moderates than conservatives in Kansas government.

You don't have record spending levels and tax increases if there were all these radical conservatives in power.

[rrshock]

There are still more moderates than conservatives in Kansas government.

You don't have record spending levels and tax increases if there were all these radical conservatives in power.

But you do have Brownback, a radical conservative, who has this all messed up. Plus i was under the impression that the Brownback bunch forced most of the moderates out.

[SB Shock]

Plus i was under the impression that the Brownback bunch forced most of the moderates out.

Wow, I didn't know that brownback was like Chavez and could just circumvent Kansas elections.

[wsushox1]

Wow, I didn't know that brownback was like Chavez and could just circumvent Kansas elections.

He wants to be able to circumvent the Kansas courts.