Kansas gov to outline plan for balancing budget; proposal for higher tobacco taxes expected

Kansas governor to outline budget-balancing plan

TOPEKA, Kan. — Kansas Gov. Mark Parkinson was expected to propose an increase in tobacco taxes Monday evening as he outlined proposals for balancing the state’s budget.

The Democratic governor’s aides provided few details about his plans ahead of his State of the State address. But he and his staff have dropped some hints about how he’ll seek to address a projected shortfall approaching $400 million for the fiscal year beginning July 1.

Closing the gap was the biggest issue for legislators as they opened their annual, 90-day session Monday. The House and Senate planned a joint session to hear Parkinson’s address.

The governor already has promised to push for higher taxes on cigarettes and other tobacco products. He’s also said he won’t propose deep cuts in education, social services or other government programs.

“I don’t know how you do it without new revenue,” said Mark Tallman, a lobbyist for the Kansas Association of School Boards.

But any proposal to raise taxes faced strong opposition in the Republican-controlled Legislature. Many GOP legislators argue that families and businesses are too stressed financially and that higher taxes will slow an economic recovery.

“We’ve got some difficult times,” said Sen. Ralph Ostemeyer, a Grinnell Republican. “Businesses are hurting out there. They’re saying you can’t raise taxes.”

Parkinson and his aides haven’t said specifically how much they’ll try to increase tobacco taxes. But his staff has hinted that he was considering bringing Kansas’ cigarette tax of 79 cents a pack up to the national average.

The national average for states and the District of Columbia is $1.34 a pack, according to the Washington-based group Campaign for Tobacco-Free Kids. Legislative researchers estimate that increasing Kansas’ tax by 55 cents a pack would raise $88 million during the next fiscal year.

But House Majority Leader Ray Merrick, a Stilwell Republican, is skeptical. He said consumers in border counties are likely to cross state lines to get cigarettes, especially in the Kansas City area.

Missouri’s tax is 17 cents a pack, higher only than South Carolina’s tax of 7 cents.

“We’re not going to get the return we think we’re going to get,” Merrick said.

Many Democrats also have talked about closing exemptions to the state’s 5.3 percent sales tax or reversing tax breaks granted in previous years, especially to businesses.

Parkinson, other Democrats and advocates for education and the needy argue that the state did enough budget cutting last year.

The state expects to spend $651 million less in general tax revenues in its current budget than in it did two years ago, a drop of nearly 11 percent.

Federal stimulus funds helped some, but belt-tightening has occurred across state government.

Kansas closed three minimum-security prison units in 2009 and cut back on highway maintenance. Public schools had 3,700 fewer teachers and other staff this fall.

In November, the state cut what it pays doctors for services under its Medicaid program by 10 percent. The state recently stopped paying for dental care for some seniors.