Tobacco Facts.

TOPEKA — Remember that penny sales tax you used to pay to build the downtown arena in Wichita?

Now, Democratic Gov. Mark Parkinson is proposing a similar plan statewide — a three-year, 1-percentage point sales tax to help rescue the recession-battered state budget from a $400 million deficit.

He also proposes increasing cigarette taxes by 55 cents a pack and quadrupling the tax on other tobacco products.

The alternative would be cuts that would virtually paralyze state government, he said in his State of the State address at the Capitol on Monday night.

The state has seen its annual revenue drop from $6.4 billion in 2008 to $5.4 billion for 2010.

“As a person who is fiscally responsible, as a person who has cut more money out of the Kansas budget than any Kansan in history, there isn’t $400 million that we can responsibly cut,” Parkinson said. “Now is the time to stop cutting aid to education, to stop cutting aid to public safety, to stop cutting aid to our elderly and disabled.”

A three-year 1 percentage point increase in the state sales tax, up to 6.3 percent from the current 5.3 percent, would generate about $308 million more, Budget Director Duane Goossen said. After 2013, a 0.2 percent increase would remain, with the additional revenue going to highway projects.

Cigarette taxes would rise to $1.34 a pack, up from 79 cents and, with an increase on tobacco products, would generate about $70 million.

The tax increase proposals were met with criticism on both sides of the aisle.

Majority Leader Ray Merrick, R-Stilwell, claimed the budget presented was unconstitutional.

Parkinson abdicated his duty to taxpayers, he said, “by refusing to offer a balanced budget and demanding the largest tax increase in Kansas history.”

“He had no solution. You cannot tax yourself out of a recession and you cannot tax yourself to prosperity,” said Rep. Joe McLeland, R-Wichita, who sits on the House Appropriations Committee, which handles budget issues.

Rep. Mario Goico, R-Wichita, said he is concerned by the regressiveness of a sales tax increase, noting food is a taxable item. “I don’t want to put any more burdens on unemployed workers, especially in Wichita, where we have large numbers of unemployed people,” he said.

Some Democrats were reluctant as well.

“I personally cannot support a sale tax increase because it is asking middle class Kansans to pay more at a time when they simply cannot afford it,” said Rep. Raj Goyle, D-Wichita.

A sales tax increase would mean people had to pay more for necessities such as groceries, he said.

Democrats believe additional revenue discussions should possibly include an increase on income tax since that is based on a person’s ability to pay, said Senate Minority Leader Anthony Hensley, D-Topeka.

“We’re a long way away from deciding what sort of revenue source package that we put together,” he said.

But others agreed it was time to stop the cuts.

“I thought his message was a good message, which basically said how much is enough, how big of class sizes are too big, how many teachers do we have to lay off?” said Assistant House Minority Leader Jim Ward, D-Wichita.

Education, reserves

The $5.8 billion proposed budget for 2011 includes a $50 increase in per-pupil spending for public schools, restoration of a previous 10 percent cut to Medicaid provider payments and a $10 million increase for higher education.

“It balances with nothing to spare,” said Goossen.

If the governor’s proposed increase in per-pupil state aid passed, it would mean approximately $3.5 million for Wichita schools, the state’s largest school district.

“It’d be a strong statement of support of public education” said Wichita superintendent John Allison.

However, he said he doubted the benefit — or political feasibility — of a sales tax.

Parkinson’s budget would also hold onto $44 million that counties would have gotten to offset the machinery and equipment tax that lawmakers eliminated a few years ago. Another $10 million would come from the state city county highway fund.

He also endorsed a proposal that would create a “rainy day” reserve fund proposed by two state senators. The idea would require the state set aside revenue in years that the state’s revenue increase by more than 3 percent.

Without the proposed tax increases, the state would have to make about $400 million in cuts to have a balanced budget, Goossen said.

Those cuts would probably include $5 million less for aviation research, deeper cuts to public education and cuts to the state Department of Corrections, which could result in the prison in Winfield being closed, Goossen said.

“The reductions required to balance without additional revenue are dramatic and crippling,” Goossen said.

Senate President Stephen Morris, R-Hugoton, said he thought a cigarette tax increase had a better chance of passing but he was pleased to see part of the sales tax increase going to highway projects.

He projected the likelihood of both chambers passing the full 1 percent sales tax at “less than 50-50,” although he said a smaller increase might have a chance.

Tax-increase concerns

Two Wichitans said they were concerned about the proposed sales tax increase.

Laura Bianco, 27, is a Wichita State University student who hopes to be a physical education teacher.

“It’s hard, especially if they’re going to cut the budget, and the first things they cut are P.E. and art and music…. But I don’t want to spend another extra penny,” she said.

“What’s going to happen is we’re not going to buy as much. It could throw everything the other way, where people are not going to spend the money and not help boost the economy.”

“I’m trying to save as much as I can with student loans and working full time,” said Bianco, who works evenings at the Wichita YMCA.

Todd Hunter, 34, an engineer at Cessna, said increasing the sales tax “will only make people cut discretionary spending, which will only make the problem worse.

“I think he (Parkinson) is looking at how well the arena tax did, but that was when the economy was up and people had jobs. … I don’t think that’s going to happen this time.”

“I like to think the legislators are going to get their constituents’ opinions, and most of them aren’t going to like the idea of a tax increase right now.”

Smoking ban

Parkinson also proposed a statewide smoking ban.

“Seventy-five percent of Kansans want a smoking ban and I’m asking you to give it to them,” he said.

Rep. Pete DeGraaf, R-Mulvane, questioned Parkinson’s contention that 75 percent of Kansans want an indoor smoking ban and suggested that it should be left to communities and business owners to decide that for themselves.
BY JEANNINE KORANDA AND DION LEFLER

Related posts:

1. Doyle proposes to help smokers quit By one estimate, the increase in federal cigarette taxes due...
2. Pennsylvania income tax increase hinted As Pennsylvania’s predicted budget deficit crept to $3.2 billion, a...
3. Higher Florida cigarette tax could increase sales of e-cigarettes When Florida’s new $1 tax on cigarettes takes effect in...
4. Californians support and need an increase in the tobacco tax California has not raised the state cigarette and tobacco tax...
5. Tobacco sales down in wake of new tax Cigarette sales have plunged, and smokers have been streaming across...
6. Tobacco tax, decrease deficit With Kansas potentially facing another budget deficit in 2010, Gov....
7. Debate over hefty cigarette tax increase heats up Health care advocates are imploring Republican lawmakers and Gov. Arnold...
8. SC Finance Committee reached the agreement over cigarette tax increase South Carolina Assembly is almost certain to approve the cigarette...
9. Poll shows broad support for tobacco tax increase More than seven out of 10 California voters support a...
10. Illinois smokers are desperate about upcoming tax increase Keep smoking and give children a chance to see a...