Kansas Survives Year Without a Statewide Tax Increase

Published January 1, 2005

For the first time since 1998, Kansas legislators in 2004 declined to enact a statewide tax hike, one of several reasons 2004 could be considered a historic year for Kansas taxpayers.

That achievement may prove to be short-lived, however, as the Kansas Supreme Court’s school finance decision has yet to be announced. That decision, which will determine whether the aggregate funding provided for public elementary and secondary education is “suitable” under the Kansas Constitution, is likely to shape the proposals and issues taking center stage for 2005 at the statehouse.

High-Taxers Lost Support

Governor Kathleen Sebelius, a Democrat, was a major loser at the ballot box twice in 2004. In November the Democratic minority in the legislature shrank from 55 seats to 52 seats in the Kansas House and Senate.

Sebelius nearly lost three more Senate allies, as three of the Senate races won by Democrats were decided by fewer than 700 votes. The overall Senate balance remains 30 Republicans and 10 Democrats.

Equally bad for the governor was the fate of Republicans who joined her in attempting to raise taxes and spending. In August, GOP primary election voters defeated several pro-tax Republicans, including Bill Kassebaum, Cindy Neighbor, and even the Senate tax committee chairman, Dave Corbin. As a result of the August Republican primary and November general election, there will be more fiscal conservatives in the Kansas legislature in 2005 than in 2004.

Sales Tax Hike Defeated

In northeast Kansas and northwest Missouri, a proposal for a bi-state, one-quarter percent sales tax hike was defeated in four of the five counties where it appeared on the ballot, stopping it from being enacted anywhere in the bi-state area. The proposal would have applied in Kansas and Missouri counties surrounding Kansas City, to fund renovations of Arrowhead and Kauffman stadiums for the Chiefs and Royals (the city’s professional football and baseball teams), as well as for “cultural” projects.

Although many such tax hikes were defeated, the “carrot-and-stick” approach to raising local sales taxes worked in several Kansas communities.

The carrot approach of promising property tax relief if the voters would approve a 1 cent local sales tax worked in Pottawatomie County. The tax increase raised the total rate to 6.3 percent effective January 1, 2005.

In an advisory vote in Sedgwick County, the stick approach was used successfully by tax hike proponents who threatened voters that if they rejected a “temporary” two-and-a-half year county sales tax hike, the only alternative would be a 20-year property tax hike. A 52 percent majority voted for this increase in the local sales tax, from 6.3 percent (which included a 1 percent county tax) to 7.3 percent. The legislature will have to act to give Sedgwick County the authority to hike its portion of the tax from 1 to 2 percent.

Governor Planning Tax Hikes

Sebelius is being mentioned as a possible national candidate for the Democrats in 2008. In the meantime, she has decided to work toward raising excise taxes on tobacco in addition to her previous requests for higher property, income, and sales taxes. The governor’s push for higher taxes before the Kansas Supreme Court rules on school funding, however, is out of step with the fiscal conservatism projected by a sizable majority of Kansans in the 2004 election.

Karl Peterjohn ([email protected]) is executive director of the Kansas Taxpayers Network.