With a gloomy forecast for revenue that gets worse by the day, legislators in Topeka are trying to come up with solutions.

The latest numbers show a $106 million shortfall for the remaining fiscal year that ends June 30 and a $450 million hole for next year.

Earlier this week Gov. Mark Parkinson and Republican Senators agreed that taxes may have to be raised to address the issue.

Rep. Lee Tafanelli, R-Ozawkie, acknowledges that tax increases may be a reality. But he is still approaching a tax bill with caution.

This week legislators were set to debate a bill that addresses sales tax exemptions on utilities, religious organizations and other not-for-profits.
Tafanelli said he doesn’t believe the bill will survive, but said tax increases may be an option the body moves towards.

He said he has concerns about the bill with the state of the economy.

“If someone is on the edge and we impose a sales tax exemption on utility bills that may be what takes them over the edge,” he said.

Tafanelli said the economic indicators worry him the most.

“For those who thought we had hit the bottom, when we got those February receipts numbers, we haven’t hit the bottom yet economically and that’s what concerns me the most,” he said. “We’re still somewhere on the downward slope.”

Tafanelli said income withholding is down five to seven percent which means fewer people are working. He said legislators need to find ways to get Kansans back to work.

“When people are back to work that means they’re paying their mortgages and they’re buying commodities,” he said. “That is a little larger problem that we are going to have to get our arms around.”

He said the state also needs to be sensitive to border communities when it comes to sales tax. He said it’s very easy for those near borders to cross state lines to buy goods cheaper.

Tafanelli said any tax increase is hard to swallow, especially for those on the lower rungs of income but tough choices have to be made.

“These are very complicated issues and there’s going to be trade offs and that’s the thing people are going to have to understand,” he said.