Kansas Sales Tax Hike Cuts against State's Image

By John Hanna | May 12, 2010 | 5:49 PM EDT
Topeka, Kan. (AP) - Come July, shoppers in Kansas will be handing over more money on every purchase because of a sales tax increase at odds with the state's image as a conservative stronghold.
Even as Republicans from Kansas talk up lower taxes and smaller government in Congress, the GOP-led state Legislature approved the jump in sales tax from 5.3 percent to 6.3 percent that critics say makes Kansas more like California than its Midwestern neighbors.
Across the country, much of the talk has been about budget cuts as states try to wrestle their spending down to balance out lower revenues. After severe reductions last year, Kansas lawmakers were hearing concern from many voters about preserving schools as districts began discussing program cuts and staff layoffs.
"No one likes the thought of paying more taxes, but with the current economic situation, some type of tax increase seems inevitable," said grocer Mark Fillmore, whose family has owned the M&M Market in Belle Plaine for three generations. He said any reasonable person knows schools need the money.
That concern for schools didn't translate into tax increases in most places. In Kansas, though, the new revenues are expected to prevent a cut in education funding in the $13.7 billion budget. People will pay an extra penny for every $1 spent on groceries and other items through July 2013.
Democratic Gov. Mark Parkinson expects to sign the measure, marking Kansas' first general tax increase since 2002, by the end of the month.
Some activists and legislators were shaking their heads at a tax increase in a Republican-leaning state with a vocal tea party movement, and that the GOP-dominated Legislature refused in an election year to block an outgoing Democratic governor's push to raise taxes.
"It's a liberal decision," said Grover Norquist, president of Americans for Tax Reform. He saw the move as surprising - even "weird" - given decisions by governors and legislators this year in states including Idaho, Louisiana, Idaho, Minnesota and New Jersey to avoid higher taxes despite pressing budget problems.
Indeed, the Kansas state GOP's platform calls for a reduction in government spending "at every opportunity."
But Republicans legislators who worked with Parkinson and his fellow Democrats said they were compelled to push for a tax increase after multiple rounds of cuts last year. The state trimmed nearly $1 billion from its budget and dropped base aid to public schools by $421 per student, though federal stimulus funds eased some of the pain.
"I guess I would see Kansas as a responsible-acting state, and that doesn't have anything to do with whether you're red or blue," said Senate Ways and Means Committee Chairman Jay Emler, a Lindsborg Republican.
Nicholas Johnson, director of the state fiscal project for the Washington-based Center on Budget and Policy Priorities, said 33 states have raised taxes in some way since the recession began in 2008. The most common option appears to be raising tobacco taxes, which more than 20 states have done, according to the National Conference of State Legislatures, but sales and even income taxes have been in the mix.
New Mexico recently enacted a slight increase in its equivalent of the sales tax, though the governor vetoed a measure to apply the tax to groceries. And Arizona voters decide next week whether to approve raising the state sales tax from 5.6 percent to 6.6 percent for three years.
Depending on that vote, Kansas will rank 10th or 11th in the country after July 1 for its tax rate, according to the Federation of Tax Administrators. That's up from 28th now.
"We're ranking up amongst the Californians," said House Taxation Committee Chairman Richard Carlson, a St. Marys Republican who opposed the increase. California has the highest state sales tax rate, at 8.75 percent.
Kansas, which reliably votes Republican in presidential elections, is seen by many as the counterweight. It has perennial legislative debates over restricting abortion, and twice since 1999 the state school board attracted international attention with debates over how evolution should be taught in public schools.
But the state also has a political culture in which GOP moderates are still a significant bloc in the Legislature - creating openings for minority Democrats to build alliances.
And education funding is where the two groups come together most often. A bipartisan coalition assembled and passed big increases in aid to public schools in 2005 and 2006, after the Kansas Supreme Court deemed funding levels inadequate.
Schools gave up some of those big gains last year, and Parkinson successfully pitched a sales tax increase as a way to prevent schools from going backward even more.
"The perception is that Kansas is a conservative state," Parkinson said Wednesday. "But I think our history just demonstrates the opposite. We are a progressive state."
Associated Press Writer Roxana Hegeman in Wichita contributed to this report.
Come July, shoppers in Kansas will be handing over more money on every purchase because of a sales tax increase at odds with the state's image as a conservative stronghold.