Archive for Thursday, May 7, 2009

House votes for 2.75 percent across-the-board state budget cut; bill goes to Gov. Parkinson

May 7, 2009

— Topeka — A bipartisan plan to implement a 2.75 percent across-the-board cut to the state budget was given final approval today and sent to Gov. Mark Parkinson for his consideration.

The final action on the spending bill was made in a dramatic House vote where Democrats and a group of moderate Republicans overturned the wishes of House GOP leaders who wanted deeper cuts.

The coalition fashioned a 64-60 vote in the House, two days after Democrats and moderate Republicans scraped together a 21-17 vote in the Senate for the bill.

Lawmakers are in the ninth day of the wrap-up session to address a $328 million deficit for the fiscal year that starts July 1.

Republicans on the House Appropriations Committee had approved a bill that called for a 4.8 percent across-the-board cut.

But opponents of that measure called on the House to agree to the earlier-passed Senate bill with the 2.75 percent across-the-board cut.

“We will not get anything better,” said state Rep. Annie Kuether, D-Topeka.

State Rep. Jerry Henry, D-Atchison, read a long list of social service programs that would be cut under the 4.8 percent reduction. That proposal, he said, “would bring so much pain we probably couldn’t stand it.”

But others argued that by not approving deeper cuts, lawmakers ensured there will be a tax increase to bridge a hole that still exists in the spending.

Others, however said the gap -- somewhere between $35 million and $70 million -- can be bridged without a tax increase.

Comments

Peabody 5 years, 3 months ago

I was one of the 64 representatives to vote in favor of this budget bill. I believe it is the best chance we have to support our public education system and persons who have developmental challenges.

I know many of you on this site disagree with my perspective. I welcome your comments to explain to me and other readers why I am mistaken.

Tony Brown State Representative, 10th District Baldwin City

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NanCrisp 5 years, 3 months ago

Tony, you probably know that while B.C. slept all week, there has been a lot of news in the LJW and the TCJ about all the budget proposals and votes that have entertained both the Senate and the House. You guys have been way too busy! Unfortunately, it's not over, by far. After following all the ups and downs this week, I believe the House bill offers the best compromise -- for now. I think the common sense approach simply has to be that everyone has to give up something. Every business is giving up profitability. Every family is giving up income (either directly by layoff, work reduction or pay lowering; indirectly by increased costs and decreased investment earnings). We all have to get down to brass tacks and determine what is truly necessary and what is just fluff. I, for one, hope our representatives in local, state and federal government are able to properly discern the difference.

I believe that the greatest error our former governor and members of our State legislature have made to date was to grossly over-anticipate state tax revenues. To this day, I'm berated for "making dire predictions" here, but to date my predictions are playing out to a very high degree. The reason? I read; and read between the lines. This week we're hearing that numbers such as unemployment and retail sales are not as bad as was expected, and the stock market has been rallying. If you read just the headlines, this will be what you come away with: Things are looking up! But if you read the articles below those headlines, and read them all the way to the end, you'll find some very interesting facts in the last few paragraphs. Unemployment is expected to grow to over 10% in 2010. The jobs we are losing are disproportionately the higher-paying blue-collar jobs (in April: 110,000 construction jobs lost and 149,000 manufacturing jobs lost). The loss of this type of job puts the lower middle class under. As one economist was quoted in a CNN web article, "The crisis in the labor market continues to deepen at a stunning rate." As for businesses, another economist warns that there are many bankruptcies yet to come. I don't have to listen to economists to know that's right; I see it every day among fellow business owners throughout the K.C. area.

All of this bodes very ill for tax revenues of all kinds for several years to come. The shrinking of Americans' wages could last a decade, even after the economy begins to ramp up. By that time, many baby boomers will be retiring, further eroding the income tax base. Even if we identify a new technology to replace all these lost jobs, it will take years to build it up to any kind of economic boom. So, when you are budgeting for the current crisis, just remember that this isn't a one-time fix and then back to business-as-usual in 2011. We all need to budget more wisely, strategize more rationally. More importantly, we need to stop being a wasteful society and see what we can fix up, do more with, maintain better, or do without.

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oldschool 5 years, 3 months ago

Tony - I am glad the cuts were limited to 2.75%, but I know this won't solve the deficit completely. I read an article that there is a proposal for Kansas to de-couple its tax laws from the federal tax laws and the targets seem to be hitting those hurt by the recession the hardest.

The proposal mentions taxing $2,400 in unemployment benefits recently exempted from federal tax. It also mentions disallowing the 50% bonus depreciation which would affect many small business owners. Also mentioned were reduced earned income credit and taxing discharge of indebtedness not previously subject to tax.

Has this proposal been shot down? Let's raise the rates at the top of the scale instead of kicking the taxpayers who are already down.

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