Category Archives: Kansas Politics

Fiscal Responsibility







We Must Make Taxes Equitable

In 2012, the Kansas Legislature eliminated Kansas individual income taxes on business income earned by pass-through entities such as sole proprietorships, partnerships, LLCs, and S-corps.  The rationale was that the businesses would use the money to create more jobs and stimulate the economy. It did create jobs for attorneys and accountants, as the 191,000 small businesses it was to help soon proliferated into 330,000 exemptions as businesses rushed to restructure so as to take advantage of the tax break.

The tax cuts did not stimulate the economy as hoped as many companies did not use the money from the pass-through tax cuts to create jobs. The tax cuts did cause a hole in the Kansas budget which grew by about $70 million each month as time went by, eventually reaching $7.1 billion.  Rather than rescind the tax cuts, the legislature  borrowed against KDOT funds, which  cost the state about 80,000 high-paying construction jobs. It also made cuts to programs which actually create jobs, such as in public service, education, and healthcare.

In 2015, the legislature tried to fill the budget hole by passing the largest tax increase in the state’s history. The increases fell mostly on low-income workers and their families, demanding more from those least able to shoulder a higher share of the cost of funding schools, roads, and hospitals.  The 2015 tax increase raised cigarette taxes and sales taxes, increased fees for many government services, and eliminated some tax deductions for property tax and mortgage interest payments. Governor Brownback’s budget director made the case for sales tax hikes by warning that refusal to do so would force another round of stiff cuts to schools funding, Medicaid reimbursements, and criminal justice. Kansas sales taxes are now the 8th highest in the nation and low income workers must pay a larger share of their income to buy necessities and food.

Together, the 2012 tax cuts and 2015 tax increases drove tax rates up for the poorest 20 percent of Kansans, slightly reduced the tax liabilities for middle-class earners, and gave about $20,000 a year back to the richest taxpayers. Does that sound equitable?

Finally, in August of  2017, the Kansas Legislature overrode a veto by Gov. Sam Brownback and did away with the LLC loophole. The Legislature also increased Kansas income taxes to form a more equitable tax structure and put the state on a firmer financial basis. However, no provisions were made to repay KDOT or the KPERS funds.

On a positive note, the 2019 budget had a small surplus though it did not pay back most of the money borrowed in the past. This summer, the Governor and the leaders of the House and Senate plan to meet and examine the entire tax structure. The Governor has now appointed  bipartisan leadership for the panel,

Kansas Must Pay Back KPERS

In 2014, Kansas reduced it its contribution to KPERS, the state’s pension system, by $40.7 million. It did this by dropping the employer contribution rate to 9.5 percent from 12.1 percent. KPERS, at that time,  had an unfunded pension liability of $7.4 billion which, before cuts, was projected to go down to zero over the next 20 years.The cut did not affect payments to current retirees, but it meant  that the state wouldn’t be able to pay all it owes in future pensions.

On May 1, 2016, Kansas decided it would delay another $92.6 million in KPERS payments. The money was to to be repaid no later than Oct. 1 with an 8 percent annual interest, which was KPERS’s average rate of return. On May 03, 2016 Moody’s gave Kansas an issuer rating of Aa2 and revised its outlook to negative. The rating is important as it affects the interest rate at which Kansas bonds are issued. Moody’s  Aa2 rating recognized Kansas’ stable tax base and fundamental economic capacity to balance its budget and fund its pension liabilities. The rating also incorporated the state’s financial shortfalls caused in part by large tax cuts, as well as a long history of underfunding its pension plans. The payment to KPERS was not paid in October of 2016 as promised.

The 2019 Legislature made a great step toward repaying KPERS by passing SB 9, which paid $115 million into the pension fund. That repaid  the $92.6 million payment that was deferred in 2016, but required $13 million in accrued interest. The 2019 Legislature also followed through on a $56 million payment which was promised in 2018. Going forward, these payments will save us millions of dollars in interest and shows the state’s dedication to having a solid pension fund.

KDOT: How to Really Create Jobs

Many of Kansas’ failed economic  policies were justified as “creating jobs”. They often had the opposite effect. Kansas’ long tradition of good, safe roads and the thousands of jobs necessary to build and maintain them, was crippled by the diversion of funds from KDOT.
In 2010, the Kansas Legislature enacted a  10year highway/transportation program to ensure job growth, economic development, safety and overall prosperity for our state. The  $8 billion, 10 year  program was funded through a variety of sources, including dedicating four– tenths of a cent in state sales tax to the highway fund and bonds.  About half was to maintain the state highways and half was was targeted for transit, air, rail, and transportation infrastructure.
To plug budget holes caused by the 2012 pass-through tax cuts, the state began“temporary borrowing” from state highway funds. That soon turned into seemingly endless transfers from KDOT to shore up the state’s general fund, as shown in the chart. Eventually, the legislature transferred a total of $2.4 billion from KDOT to plug budget holes. Dr. Michael Babcock, from the Department of Economics at Kansas State University, estimated that for each one million in construction value, 41 jobs are created. As a result, the borrowing from KDOT cost about 130,000 good paying Kansas construction jobs.
The dedicated four– tenths of a cent in state sales tax originally generated $570 million for the highway fund. The Legislature has now restored $378 million from sales tax, but that is certainly not adequate. The 2019 Legislature put an extra registration fee on EVs which is expected to raise about $600,000 annually, which is an insignificant amount. It is also not entirely fair as EV owners pay  in other ways such as sales tax on electricity, additional personal property taxes, and a reduction in pollution and its associated costs. The most reasonable way to fund our roads into the future would be to restore the 0.4 cent in sales tax diverted from KDOT. The Legislature should then  add the additional amount necessary to insure good roads, which would come partly from sales taxes and partly from the additional taxes paid by electric vehicle owners.

Voter’s Rights


Registering to vote: In 2011, Kansas passed the Secure and Fair Elections Act which stated “newly-registered Kansas voters must prove U.S. citizenship when registering to vote.”  That seemed reasonable since Kansans must provide proof of citizenship  to get a driver’s license or photo ID.  However, the Kansas Secretary of State interpreted the law to mean that voters who register through the DMV or by using the federal form must also submit proof of citizenship to the County election office.

This has created an awkward situation where voters who have not submitted their documentation to the election office may vote in federal elections, but are barred from voting in Kansas elections. The Wichita Eagle estimated  that as many as 50,000 voters may have been affected by this ruling, many of them  young first-time voters. We encourage our young people to be good citizens, yet Kansas has created obstacles to their registering and voting.

This has been very expensive for Kansas. It has created unnecessary paperwork, required creation of a two-tiered voting system, one for federal elections and one for Kansas elections, and led to expensive lawsuits challenging the interpretation of the law. This has also been damaging to the Republican Party, as it is obvious to young voters who is creating the obstacles to their voting. Recent court rulings allow citizens who register using the federal form at to vote in all state elections. However, the Kansas Secretary of State has not changed the State’s website to be consistent.

Counting votes accurately: During the 2014 election, several candidates who were behind in the polls won their elections. Polls are not votes, but this has caused concern among some Kansans that votes may not have been counted accurately. This could occur by errors in the voting machines, or even possibly hacking. It is possible to determine if the votes were counted accurately by a voting audit, a statistical analysis of the voting tapes produced by the voting machines. Dr. Beth Clarkson, a statistician at WSU, has tried to obtain the tapes to ensure that the votes were counted accurately. However, the Secretary of State opposed this, and has argued successfully that to release the tapes would compromise the privacy of the voter. That is unlikely, as it would would require the voter’s precinct and the exact time to connect a voters name with their vote, something impossible to do.

The legislature is working on legislation to require a random audit of voting machines to assure voters that their votes are accurately counted. That is encouraging. The Kansas Legislature must act to ensure that there are not obstacles to registration and voting, and to assure voters that their votes are accurately counted.