KEPC UPDATE: MO tax overhaul derailed, OK, W&M notes, Oops!

In this issue …

  • Missouri income tax overhaul derailed by court
  • Meanwhile in Oklahoma …
  • Ways & Means notes from Tuesday
  • Oops!

 

Missouri income tax overhaul derailed by court

The petition drive of a Missouri Billionaire to eliminate that state’s income tax has run into a brick wall.

A Columbia, Missouri judge ruled late Friday that the language in the petition to force an election was not clear to voters.  Cole County Circuit Judge Patricia Joyce said the petition should tell voters the question will cost the state $7.5 billion annually with no guarantee of replacement revenue.

The ruling means billionaire Rex Sinquefield’s organization Let Voters Decide has to reprint petitions and get 100,000 valid signatures by May 6 to put the question on the ballot.

Media reports from Missouri quote Chuck Hatfield of the opposition group Missourians for Fair Taxation as saying, “It will be very near impossible to get this done.”  The opposition is mainly funded by the Missouri Realtors Association.  It was the Realtors who successfully filed suit over the ballot wording, leading to Friday’s ruling.

Missouri and Oklahoma efforts have been cited by Kansas politicians and groups who want to eliminate the Kansas income tax as one reason to proceed quickly.

The Kansas City Star has reported Sinquefield was a contributor to Kansans For No Income Tax.

The Star editorialized on Friday’s court decision, saying “good riddance.” Read it here.

 

Meanwhile in Oklahoma …

A bill to reduce and eventually eliminate the Oklahoma income tax passed the Oklahoma Senate last month.

It reduces that state’s income tax from 5.25 percent to 2.5 percent for tax year 2013, with total elimination by 2022.  All income tax credits, along with most deductions and exemptions would be eliminated for 2013.

The Oklahoma Policy Institute has actively opposed the legislation.  The Institute argues elimination of income taxes means more cuts to education, less funding for the disabled, and the likelihood of higher sales and property taxes.

 

Ways & Means notes from Tuesday

The Ways and Means Committee of the Kansas Senate is meeting again today after a full day yesterday.

Some discussion of note:

  • The recent Powerball win by a Kansas resident increases 2012 income tax receipts to the state by $7.9 million.
  • On KanCare, the Governor’s estimates of savings are being questioned because contracts for managed care have not been signed.  There is no update on the status of a requested federal waiver.
  • The Committee reviewed two estimated ending balances based on the agreed to budget conference committee provisions while taking into account the Senate version of school finance.  One estimate looks at the balance with the Senate income tax cut and the second looks at the balance without income tax cuts.  The calculations include the KPERS fix, property tax relief, and transfers to the Kansas Bioscience Authority.  They are based on the latest consensus revenue estimate, which came out last week.

 

With the tax plan:

FY’12:  $458.9M ending balance

FY’13:  $346.4M ending balance

FY’14:  – $680.3M ending balance (a negative ending balance)

 

Without the tax plan:

FY’12:  $458.9M ending balance

FY’13:  $579.5M

FY’14:  $614.9M ending balance

Ways & Means Chair Carolyn McGinn (R-Sedgwick) said it sounded pretty good and was the biggest balance the state has seen in a long time.

 

Oops!

We have a correction to yesterday’s KEPC Update item on Economic Lifelines/KDOT meetings across the state.  We incorrectly said meetings at Pittsburg and Overland Park had been held this week.

Those meetings are scheduled for Monday, April 23.

The Southeast Kansas meeting is at 9 a.m. at Via Christi Hospital, DePaul Hall, 1 Mt. Carmel Way in Pittsburg.  It is hosted by the Pittsburg Area Chamber of Commerce.

The Northeast Kansas meeting will be hosted by the Overland Park Chamber at the Chamber’s offices at 9001 W. 110th Street, Ste 150, in Overland Park.  It begins at 1:30 p.m.

We regret the error.