May 11, 2015
Kansas tax policies including the budget and unprecedented changes were primary discussion topics during the Hays Rotary Club meeting Monday at the Hadley Center.
The Rotary welcomed Kansas Center for Economic Growth’s Executive Director Annie McKay alongside Senior Fellow and former State Budget Director Duane Goossen.
The two presented information about the legislative session focusing on budget concerns and later led a discussion regarding the matters.
“One of the things I always appreciated about Duane was whether you liked the message he brought you from the governor or not, you knew it was the truth, and that is very important when you’re dealing with government policies,” said former state senator and Rotary member Janis Lee.
McKay began the discussion with an explanation of KCEG.
“We produce briefs, reports and infographics looking at the impact of budget and tax policy on things that matter to Kansans — like our schools, our roads, access to health care and all sorts of issues,” McKay said.
Before introducing him, the executive director explained Goossen had recently joined KCEG as a senior fellow. Prior to joining, Goossen was a seven-term member of the Kansas House of Representatives and a budget director under three governors for 12 years.
Right off the bat, Goossen said “the state of Kansas is in some deep financial trouble and is now experiencing a budget that is badly out of balance.”
Ultimately, to be balanced, income and expenses have to be at least equal, he said.
“In Kansas, right now, our income has fallen dramatically to the point where legislators are dealing with a situation where expenses are about $800 million higher than expected revenue.”
Goossen took a look at the total budget, which included state general funds, highway funds, federal Medicaid funds and others totaling $15.3 billion.
“Two big funds to pay attention to are the state general fund and the highway fund,” he said. “Most of our tax dollars go into the state general fund, and that is the fund that lawmakers have the most discretion over.”
The individual income tax previously brought in about half of the state general fund revenue, but it has decreased to just more than 40 percent and continues to fall, according to Goossen.
“It is getting less and less,” he said. “As a result, revenue is falling.”
He reviewed expenses, explaining more than 50 percent of expenditures are applied toward kindergarten through 12th grade education. Approximately 20 percent represented Medicaid costs and roughly 12 percent of costs are due to post-secondary education.
“Nothing big can happen in the state budget one way or another without affecting education and human services,” Goossen said.
Tax policy changes were discussed including revenue reductions and increases, with a net result showing Kansas receiving $3.7 billion less through the year 2018.
“The Legislature is faced with little alternative but to try to raise taxes back up or in some way find revenue in order to meet expenses,” Goossen said. “And they’re having a hard time doing it.”
Read more from the Hays Daily News here.