Senator Holland brings state issues to Valley Falls
by Clarke Davis
The legislative session is loaded by far more issues than any time in the past decade, Sen. Tom Holland told a gathering in Valley Falls.
“If you see Topeka as a bunch of jugglers, we have a lot of balls in the air,” he said.
An overhaul of Medicaid, solving a shortfall in the KPERS retirement program, changing the school tax formula, cutting taxes, and redistricting are all large issues confronting lawmakers.
This is Holland’s 10th year in the legislature. He started in the house and is now one of eight Democrats among the 40 senators.
He began talking about the governor’s tax proposal, noting that Sam Brownback’s long-term goal is to do away with personal and corporate income tax.
“That is quite a challenge for this state that derives half of the general fund revenue from income tax,” Holland said.
At the outset, the governor would create two income tax brackets, taking the lower one from 3.5 percent down to 3 percent and reducing the upper bracket from 6.45 percent down to 4.9 percent. Business would be nearly exempt from income tax.
The cost, Holland said, would be $1.4 billion to a $6 billion budget. To make up that cost, the proposal would wipe out deductions on the income tax form including home mortgage payments and get rid of earned tax credits. Rebates on sales tax for food and the homestead exemptions would also be gone. A 1-cent sales tax imposed on a temporary basis would become permanent to further make up the loss.
“Under the proposal, the bottom 80 percent of tax filers would be losers while the top 20 percent would be winners,” Holland said.
The senator noted that the proposal was quickly opposed by many forces. The real estate people opposed removal of the mortgage interest from taxes and lot of social service agencies yelled who depend on tax credits for survival.
Holland said the governor’s desire to rid the state of income tax appears difficult when compared to the state’s that do not have income tax. Notably mineral wealthy Texas, which also has a coastline and a deep-sea port, or a state like Florida with 2,300 miles of ocean beach and a flourishing tourist trade.
State support comes from a three-legged stool — income, sales, and property, he said, and it’s unlikely the state could operate without income tax.
The three basic taxes have “become somewhat out of whack” he said over time as various adjustments have been made and they are looking at a local ad valorem tax reduction fund that would send money back to local units of government to help lower property taxes.
Addressing school finance, Holland would leave the current formula alone and begin to fund as the enconomy rebounds. He said the state has taken away $400 million in funding over the last three years.
The governor wants to change the formula and set a flat amount for students, take away many of the weighting factors, and shift much of the cost to the local level.
He spoke of the great disparity in school districts from one in Johnson County where 1 mill raises 2.5 million and a rural county in southeast Kansas where a mill raises less than $20,000.
“Republicans don’t like this plan either when they see the shift to property tax,” he said.
The same disparity exists when legislators look at a local sales tax option for schools. One area can generate a lot of tax while another would raise virtually nothing.
“I don’t see the governor’s school plan going anywhere this session,” he said. “We should be able to put a few more dollars into the current formula.”
Holland addresses the Medicaid issue in a column elsewhere in this edition.
The senator said he would visit Valley Falls again at 2:30 p.m. March 10 at the Kendall State Bank’s community room.
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