Opinion: Kansas May Soon be Flush in Spare Cash

Martin Hawver 

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Oh, there are of course the technical and philosophical complaints about the new federal income tax cuts that took effect just in time to lower your federal income tax bill this year. Don’t last long enough, the rich do better, can’t claim the dog as a dependent because you couldn’t get it a Social Security number…

You know how all that goes.

But one place that it mostly goes well is the Kansas budget.

There are dozens of little changes in federal taxes that jiggle the top line of your Kansas income tax form, but on a mass basis, that number—what you have left after paying your federal income taxes—yields for most purposes the income on which you’ll pay Kansas income taxes this year.

And the big news is that the federal tax cuts leave more Kansas-taxable income for the state to levy against.

Result: Kansas is likely to receive $138 million more than expected in the fiscal year that starts July 1.  And it just gets better… Estimates are that the next year, Kansas will take in $180 million more and the year after $188 million. That additional state income doesn’t require any icky tax increases here; there’s really nothing to blame the Legislature about because it has no fingerprints on the federal tax cuts that yield more money for the State General Fund which lawmakers will spend.

That federal trickle-down could brighten the amount available to spend in the upcoming budget year which lawmakers are now assembling, or, rather, just touching up what they planned last year to spend in the new fiscal year.

So, what happens? Well, things probably brightened for state employees looking for raises. It could mean less sales tax money pulled out of the budget of the Kansas Department of Transportation, which has canceled more than 20 highway and bridge projects in the last year. It could mean more money for health care for the poor and their children and lots of nice things.

But it will undoubtedly become just another stick to use in the fight over increasing state support of public schools demanded by the Kansas Supreme Court which says the state isn’t making suitable provision for school operations statewide.

The first scrap, remember, is coming up with a new school finance formula this legislative session and financing it and then proving to the court that the problem is solved…that children in every public school from border to border are receiving a good education.

Ironically, the new state income tax money is probably about the right amount over the next few years to meet the roughly $600 million in new K-12 spending that most of the Legislature believes is the magic amount that will see the court decide that if divvied up right, it meets constitutional requirements.

That’s if the estimate is right and if all of it, and probably a little more, is spent on schools and almost nothing else.

Expect that the additional money is already being sized-up by legislators—especially House members who all stand for re-election this year—for spending on other stuff, like raises for state workers, health care, assistance for the elderly and poor and nearly every other task of state government.

And, remember that there are conservative lawmakers—especially in the Senate which doesn’t stand for reelection this year—who believe the Supreme Court is wrong, that maybe some changes in school spending patterns are needed, but that the state is spending all it needs to for K-12. That makes the millions of increased state revenue just money in the bank.

That spare cash will get interesting…

Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver's Capitol Report—to learn more about this nonpartisan statewide political news service, visit the website at www.hawvernews.com