Kansas Revenue Secretary Nick Jordan stopped in Great Bend Tuesday to talk about the "flatter, simpler and fairer" tax plan Gov. Sam Brownback says he wants for the state.
"I’m glad you all could join us for this ‘secret meeting,’" Jordan told those who sipped coffee at the public meeting in the Great Bend Chamber of Commerce and Economic Development office. That morning, the Topeka Capital-Journal had reported that Kansas Democratic Party Chairwoman Joan Wagnon said the GOP is working "behind closed doors" on a recommendation for a trickle-down economics plan to be submitted to the 2012 Legislature. Jordan said the goal is actually to be as open as possible.
"We’re trying to lower the marginal tax rates as much as we can," Jordan said, explaining the Brownback administration wants lower corporate and personal income taxes in the state. "What we’re trying to do is get to a flat tax in Kansas," rather than the three tax brackets now in place. "We’ll probably get to two."
Businesses now pay a corporate income tax plus a surcharge; "We’ll probably eliminate the surcharge," he said.
Brownback appointed Jordan to lead a group that will make tax reform recommendations by the end of the year, and the secretary was in Great Bend on a two-day "listening tour" in western Kansas. He was met by a group that included skeptical school administrators and curious Farm Bureau representatives.
"Our purpose is a pro-growth tax policy for the state of Kansas," Jordan said. "By increasing capital flow into Kansas, the tax base will broaden so lower taxes don’t mean less revenue." He described the result as a boon to individuals who will have more personal income and to small businesses that will have less tax and red tape. It will also be apptractive to prospective businesses that will want to relocate here. "We have a lot of money leaving Kansas; we need to have more dollars stay in Kansas or coming into Kansas."
"I don’t think anything in our tax policy will affect farm taxes," Jordan told Farm Bureau members Tuesday in Great Bend.
Those who attended included Barton County Farm Bureau President Jerry Morganstern, and Harry Watts, Managing Director of the Governmental Relations division at Kansas Farm Bureau in Manhattan. Both said a key issue for Farm Bureau will be the continuation of tax exemptions on farm machinery.
But a plan that benefits small business owners, as GOP promised to do, would take in many farmers and ranchers. "As we look at the approach that you’re taking, we’re intrigued," Watts said to Jordan.
Great Bend Unified School District Superintendent Tom Vernon said he does have some concerns with a plan to reduce income taxes, which help fund education in Kansas. "My fear is, what happens when you lower the tax rates on income, and you don’t get the growth expected?" Vernon asked. The only options for school districts would be to cut services or raise local property taxes.
Jordan said advisers are studying the impact of various plans using economic modeling software, and want a "static revenue model." "We’re growing it on today’s budget. We’re not dreaming. It stays static until you take care of your obligations," he said.
"We’re not intending to cut anybody," Jordan said of the future tax plan. "It will fund the budget that the governor proposes."
Jan Peters, director of the Chamber and Economic Development in Great Bend, asked when the plan will be unveiled.
Soon, Jordan promised.
The Consensus Revenue Estimating Group that estimates the state’s revenue for budgeting purposes will meet Friday to make next year’s projections, and that will be vital information for formulating a proposal for the 2012 Legislature. Then Jordan’s team will be ready to schedule a meeting with the governor, and to go back on the road explaining any emerging plans.
"We want to get the proposal out soon because there are a lot of rumors," he said. "Everybody will have a chance to take shots at it, give input. ... We really do want to come out with something that works."
