Court Arguments and Tax Discussions

Nov 6, 2015 by

School Finance Equity Hearing in Supreme Court

The Kansas Supreme Court heard from the state and from the plaintiffs in the equity portion of the Gannon School Finance lawsuit today. The hearing took about 2 ½ hours.

Attorneys for the state were questioned first. They defended the block grant funding scheme passed by the legislature (SB 7) and asserted that the money the legislature had appropriated for the equity resolution last year was appropriate to meet the requirement.

The money that had been appropriated was about $138 million but the final cost was closer to $200 million. The state argued that the money appropriated was based on what they were told by the State Department of Education. KSDE had provided an estimate of the amount that would be needed based on the prior year’s data – the only data available at that time.

Attorneys for the plaintiffs maintained that it was long past time to resolve the issue and that the repeal of a constitutionally sound but underfunded school finance formula was an inappropriate action by the legislature.

Questioning of both sides by the justices was pointed but it was difficult to tell with any certainty what position they might be forming.

We don’t know when they will make their ruling but most expect it to come early in the session.

The issue of adequacy is still to be resolved.

Special Tax Committee considers sales tax exemptions, tax credits

A special Joint Committee on Taxation spent the last two days learning about the challenges of sales tax policy and tax credits.

The committee studied the history of the sales tax in Kansas and reviewed Legislative Post Audit studies that have been conducted on sales tax exemptions, tax credits, and economic development incentives.

They took public testimony today. Shawnee Mission Superintendent Jim Hinson gave them much food for thought regarding Tax Increment Financing Districts (TIFs) which have the potential to stress the budgets of school districts – particularly growing districts like Shawnee Mission.

KNEA lobbyist Mark Desetti testified, urging the committee to reign in the granting of sales tax exemptions by developing guidelines under which an organization would be eligible for such an exemption. Today these exemptions are generally granted every time an organization comes before the committee with a pitch leading to an enormous laundry list of individually named organizations with exemptions.

A coalition of non-profit organizations urged the committee to proceed cautiously while the Sisters of Charity made a plea for the preservation of the Earned Income Tax Credit which applies to the lowest income Kansans.

The Kansas Livestock Association and Farm Bureau both spoke on behalf of rural and agricultural interests in the state.