Governor Laura Kelly’s Council on Tax Reform met for the past two days to begin work on developing recommendations for a comprehensive tax reform program that will make the Kansas tax system that is fair for all taxpayers, balanced across the three primary revenue sources (income, sales, and property taxes) and will encourage economic expansion and development.
It’s a big job but a stellar group has been assembled to get it done.
Here are the members of the Council:
- Kansas County Treasurers Association: Joe Grisolano, Pittsburg; Crawford County treasurer, former county appraiser and school board member.
- Kansas Association of School Boards: Shannon Kimball, Lawrence; school board member and president of the Kansas Association of School Boards.
- Kansas Association of Counties: Anthony Swartzendruber, Hesston, Harvey County administrator.
- Kansas League of Municipalities: Susan Sherman, Olathe, assistant city manager of Olathe.
- Dennis Hays, Kansas City, Kan., former county administrator for the Unified Government of Wyandotte County/KCK, currently principal at Hays and Associates, LLC.
- Larry Weians, Lenexa, vice president of finance for Sprint.
- Lon Frahm, Colby, CEO of Frahm Farmland, Inc.
- Carl Brewer, Wichita, retired operations manager at Spirit AeroSystems, former mayor of Wichita.
- Duane Goossen, Topeka, former state budget director, secretary of administration, member of the Kansas House.
- Audrey Langworthy, Prairie Village, former state senator who served as chair of the Senate Tax Committee.
- John Wilson, Lawrence, Kansas Action for Children vice president of advocacy and former Kansas House of Representatives member.
- Mark Burghart or designee — Secretary of Revenue (ex-officio)
- David Toland or designee — Secretary of Commerce (ex-officio)
- Larry Campbell or designee — state budget director (ex-officio)
- Julie Lorenz or designee — Secretary of Transportation (ex-officio)
- Susan Wagle, Wichita, Senate president (invited)
- Ron Ryckman, Olathe, House speaker (invited)
- Anthony Hensley, Topeka, Senate minority leader (invited)
- Tom Sawyer, Wichita, House minority leader (invited)
The first day was filled with reports from the Department of Revenue, the Budget Director, the Department of Commerce, the Department of Labor, and the Department of Transportation. Details of current tax realities and reviews of legislative changes to tax policy over the years were presented and discussed.
The first part of second day was devoted to sales tax issues with a presentation on the Wayfair Supreme Court decision which will allow states to collect sales taxes on remote sales (think of internet sales primarily) and then a report on sales tax policy generally.
Finally, there was a presentation from Dr. Donna Ginther, interim director of the Institute for Policy and Social Research at the University of Kansas. Dr. Ginther is a well-respected researcher in economics and tax policy and will serve as an adviser to the council.
Ginther reviewed the research literature on Kansas’ last big tax policy “experiment” – the Brownback plan – and noted that the results were not good. The experiment damaged Kansas by draining revenue from the treasury which resulted in devastating cuts to programs across the state and provided no economic benefit. Rather, a primary effect was a “recharacterization of income” (changing your business tax structure to avoid paying taxes – the LLC “loophole”) and not real economic activity.
None of this was surprising to anyone who has been watching and experiencing Brownback’s “experiment.”
Ginther also discussed the challenges the council faces in doing the job – the “headwinds facing the Kansas economy.” These include changing demographics, a shrinking labor force, the impact of federal policies (immigration, trade wars, etc.), macroeconomic conditions, and a decade of state disinvestment.
You can find all the handouts from these two days by clicking here. We would highly recommend looking at Ginther’s presentation, “Summary of Selected Literature.”
The council will meet again on October 15 and 16.