By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
State budget director responds to editorial
Placeholder Image

Dear Editor,
 I would like to provide some analysis of claims made in the Editorial  titled “Taxing issue: Kansas shows astounding decline  in revenue.”
  First, the following information was used from the Rockefeller Institute: “The Nelson A. Rockefeller Institute, which  does nonpartisan public policy research for the State  University of New York, reported that Kansas had the largest  percentage of personal income tax collection decrease in  April, May and June 2014 compared to the second quarter of  2013, and the largest in the nation. Kansas had a 42.9  percent decrease in revenue. The Institute reported that the  state with the closest percentage of revenue decline was  North Dakota, at 32.8 percent. The U.S. had an overall  average decline of 7.1 percent.”
 Kansas had the largest decline in personal income tax collections because we cut income taxes the most.
The revenue decline was projected and built into the budget. It is not an appropriate comparison to compare our revenue  decline to other states for that reason. It is fair to  compare the decrease in revenue to what our estimates were  based on in the budget. When the revenue decline is isolated  to estimates versus actuals, then we are similar to other  States because of the fiscal cliff effect at the federal  level.  Why did Kansas and other states see a decrease of  revenue from the official estimates?  People that pay  income taxes through estimated payments are doing so based  on 2013 income that is deflated due to the effect where  investments and capital gains were taken out prior to Jan. 2013 as the federal tax cuts went away. This will be the  last month where we will have that estimated payment effect.
 All in all, we are 1.7% below revenue projections year-to-date. The sky is not  falling.
  The second claim made in the editorial was about the effects of the tax cut. “The results have been devastating, and the  “trickle-down” is not trickling down. No business owner  is going to hire employees they don’t need, and at the  very least, these income tax cuts should have been tied to  hiring employees. There may have been an increase of  business filings with the state, but it was mostly a race to  change the type of business to a pass through to limit  taxes.”
  This is an incorrect statement. Let’s look at what has happened. The tax cuts were intended to help small businesses grow.
 Small business income is up 26%, which is higher than our  surrounding states and one of the best rates in the country.
 What do small businesses do with their additional income?  They hire more workers and they pay higher wages. Kansas is  second in the country in job gains from new and expanding  businesses since the tax cut went into effect. Wages for  Kansas workers for July and August compared the year prior  outpace our neighbors.
 A growing economy due to small business growth along with good  stewardship of taxpayer money will place the Kansas budget  in a strong position.
 Shawn Sullivan
 State budget director