Week two of the 2009-10 Session began much like the first one, with office phones and computers being fine tuned, stationary delivered, desks and file cabinets delivered, meeting schedules posted, and a few minor bill introductions.
The revisor and research staff have been working late into the night digesting the Governor=s proposed budget. When delivered in bound book form the document resembles two Sedgwick County phone books and with about the same size print. I opted to receive mine in DVD form. The staff breaks down each department and division list of expenditures and sources of revenue.
These budget analysis are then delivered to the various budget committees in each chamber for further review. We begin meeting with the agency leaders and their staff to develop a plan that allows operation but still addresses the horrific shortfall in revenue we are experiencing.
As is the custom at budget time we all see some creative efforts to maintain the status quo with some effort made for additional spending. I would say it is safe to say there will be cuts in budgets that will affect everyone in the state. We had better prepare for the inevitable and work together to arrive at a compromised solution.
Things are not all gloomy, we did receive final approval for locating the Bio-Science facility, valued at over $450 million, in Manhattan that will bring many jobs to the state during construction and provide stable employment for many in the years to come. This facility came to Kansas because of a joint effort between the Legislators, our Kansas delegation in Washington D.C., the community leaders and KSU.
I mentioned last week about a new idea in property tax assessment and this past week I attended several briefings on the concept. AProposition K@ was developed by Dr. Art Hall PhD. Dr. Hall is the Executive Director at the Center for Applied Economics, at KU school of Business.
The property tax is a wealth tax, which is an inferior tax policy because it taxes assets instead of income. The appraised value of an asset may rise and cause a tax increase, but the taxpayer=s income may not have risen sufficiently to pay the increased tax. Also the appraisal of assets is imprecise and the practical need for mass appraisal can amplify the imprecision. Butler County has close to 40,000 parcels that are on the tax rolls.
Most Kansas homeowners have experienced these harmful effects. Over the last decade, the appraisal value of homes has grown faster than income in counties representing 98% of the population; in fact, 84% of Kansans live in counties where residential values have grown at least 30% faster than their income. (Source: KS.. Dept of Revenue, Adjusted Gross Income from the IRS and the July 2007 population estimate from the U.S. Census Bureau.)
The current Kansas property tax system has two moving parts: (1) The appraised value of the property and (2) tax rates (Mill Levy). Property tax increases are driven by the changes in these two parts.
Statewide total property taxes have increased 83% over the last 10 years; tax rates have gone up slightly but most of the damage has been caused by the 66% escalation in appraisal values. The changes are even worse for residential property, where runaway appraisals drove a 119% increase.
Elected officials should have lowered property tax rates to at least keep tax revenue from exceeding inflationary growth; instead we raise rates slightly and allowed the Astealth@ affect of escalating appraisals push tax collections up 83%.
There is simply no justification for these huge property tax increases over the last decade. It=s not driven by a need to provide services to more people; our population is only up 7%. It is not driven by inflation: property taxes overall have increased by nearly three times the rate of inflation.
Next update I will provide more details on AProposition K@. I do not know how far this will go this year, any change in the way we do things is always met with, doubt, uncertainty, reluctance, and fear to leave a Acomfort zone@ of Awell we have always done it that way@. I am keeping our local elected officials in the loop on this and I welcome comments.
Did you ever notice how odd it is that our tax code encourages debt over equity investments? We provide tax deductions for interest payments on mortgages, and loans. If you are fortunate to have cash in the bank that earns interest or other investments that provide income, we tax you on your good judgement to invest to earn additional income.
The recent economic collapse and subsequent home foreclosures and bankruptcies provides proof that the majority of Americans live on debt. Kansas and our Country have a huge debt load and so when a crisis hits we have no savings to fall back on and so we all start talking huge cuts in services. I am encouraging the State of Kansas to take a serious look at reducing our more than $4 billion debt.
On Tuesday, January 27th, Remington High School Student, Will Johnson will spend the day doing a Ajob shadow@ with me. I look forward to these opportunities to show the facility and the day to day operations to my constituents. This opportunity allows a more detailed look into the procedures and process of being legislators.
I do consider it an honor and privilege to be your representative in Topeka and I do want to know what you think. My contact information for Topeka has changed some and is 785.296.7655, or John.Grange@house.ks.gov. Or Rep. John C. Grange, State Capitol, Topeka, Kansas 66612. Thanks, John.
My Topeka office e-mail has changed to John.Grange@House.ks.gov, 1-785-296-7655, home 1115 Rim Rock Road El Dorado, 67042, 321-2087,johng@carlisleinc.net, www.johngrange.net. Thanks, John.
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