The Kansas City Star: Kansas legislation would cost the poor most, critics say
media mentionApril 12
By BRAD COOPER
The Kansas City Star
TOPEKA — This could be, for better or worse, the year of the poor in Kansas.
The dominant powers in the Statehouse — Republicans controlling the legislative and executive branches — regularly press bold measures calculated to jet-charge the economy and put more people to work.
The key ingredients focus on tax cuts and the spending rollbacks needed to accommodate them in the state budget. Republican leaders hope that feeds a good-times economy as the most potent medicine to fight poverty.
“The best thing that could ever happen to the poor is a good job,” said state Rep. Richard Carlson, a St. Marys Republican and chairman of the House tax committee.
Yet critics see a callousness in the GOP’s approach that puts the most economically vulnerable Kansans in increasing danger. They see a series of efforts that could hit the the poor: dumping tax credits for low-income workers, scrapping college savings subsidies, and drug testing for Kansans on welfare and unemployment.
Particularly offensive to many critics is a push to use a higher sales tax — which hits the poor especially hard — to make cuts to other taxes affordable.
“How much more difficult can we make it to be poor in Kansas?” asked Tawny Stottlemire, executive director of the Kansas Association of Community Action Programs, a Topeka-based nonprofit group that fights poverty.
“The more difficult we make it to be poor in Kansas doesn’t equate to having fewer poor people,” she said. “It equates to poor people having a much more difficult time living and surviving.”
Meanwhile, the legislature has shown little interest in expanding Medicaid to cover more poor people to comply with the federal Affordable Health Care Act, or Obamacare.
Discussion surrounds tax credit
The debate over how best to help the poor erupted last week in the Kansas Senate amid a move to cut by half the state’s earned income tax credit, which generally benefits lower-income families.
Senators wanted to move $42 million saved by cutting the tax credit to another state program that refunds property taxes for certain households with incomes of $32,400 or less.
Supporters of moving the money said it would benefit a broader range of taxpayers, including older Kansans on fixed incomes, people with disabilities and working parents.
Senate Vice President Jeff King, an Independence Republican and the author of the proposal, said it was hard to argue that lawmakers were picking on the poor. After all, he said, they are moving money into the property tax refund program that last year helped 123,822 low-income Kansans.
“What’s very important is not to confuse disagreements on how to help the poor with a willingness to help the poor,” King said. “We should, in this legislature, be able to have discussions about what is the best way to help those Kansans most in need.… We cannot mistake those discussions for a discussion about whether we should help the poor.”
Other Republicans saw a false choice between sending money to one group of poor people at the expense of another.
“The public policy that is being advocated with this bill is to take money from the least among us to give money to the least among us,” said Anthony Hensley, the Senate minority leader and a Topeka Democrat.
King also sponsored legislation that would require drug testing for recipients of welfare and unemployment benefits if there is reasonable suspicion they use illegal drugs. The proposal is on its way to Gov. Sam Brownback, a Republican, to sign into law.
Under the bill, if a recipient tests positive, he or she must complete substance abuse treatment and a job skills program. Anyone who refuses to complete the programs would be cut off from benefits.
Democrats criticized the bill as unfair and unnecessary. They said it would punish people who already are too humiliated and embarrassed to ask for help.
King said his bill is one of the least onerous drug-testing proposals around.
“If you look at other bills around the country, none of them has the focus on treatment, job skills training and helping people overcome their addictions and their joblessness as the bill in Kansas,” King said.
College savings
Meanwhile, the legislature is poised to slash a program intended to help the poor save money for college.
The program on the chopping block benefits nearly 1,000 Kansans who receive up to a $600 yearly match from the state for contributions they make to the state’s 529 college savings plan — a way to shelter college savings accounts from taxes.
By law, that program can aid as many as 1,200 students with a $600 match, meaning it would cost taxpayers about $720,000 if it were fully used. The legislature is looking to fund the program at $350,000, which would help 583 students. The program is currently funded at about $500,000. There also is a bill pending in the House that would eliminate the program.
Leading Republicans not only question whether it is government’s role to contribute to students’ college savings, but whether some families cheat the program by enrolling in college, quickly dropping out and then collecting refunds that would include the state’s match.
Other lawmakers suggest that the program might actually hurt students in their quest for financial aid.
Supporters of the program say the amount of money being matched is so small that the effect on getting other financial aid would be negligible.
The nonprofit group Kansas Action for Children argued that the program provides an incentive for low-income families to save money for college, saying that a child with a college fund is more than four times more likely to graduate from college than a child without an account.
Tax rules
But Brownback’s tax policy has drawn the most attention.
Last year he introduced a plan for cutting income taxes that included eliminating the earned income tax credit with a promise to put the savings back into social service programs.
The legislature didn’t agree to eliminate the earned income tax credit but did wipe away several other tax credits, including ones for child and dependent care, rent and sales taxes paid on food.
Brownback signed the income tax cuts into law, leading to a roughly $700 million revenue hole for fiscal 2014 that the legislature is trying to patch this year.
The Senate is pushing to remedy the problem by keeping a six-tenths of a cent sales tax that was scheduled to expire this summer.
“We’re talking about layering bad policy on top of bad policy,” said Annie McKay, the executive director of the Kansas Center for Economic Growth. The Topeka-based think tank was formed in January and gets funds from the Annie E. Casey Foundation, which advocates for children.
“In the future, we will be absolutely looking at increasing taxes in other ways to make up revenue loss. It is absolutely inevitable,” McKay said. “Who’s going to shoulder the bulk of that? Low- and moderate-income Kansans.”
McKay points to studies done by the Institute on Taxation and Economic Policy that showed the poorest 20 percent of Kansans would pay more in taxes under the tax plan enacted last year once the elimination of the food sales taxes rebate and other credits are considered.
The same group did another analysis of the governor’s plan to cut income taxes this year coupled with keeping the entire penny sales tax that the legislature approved in 2010.
That analysis showed everyone getting a tax cut except the poorest 20 percent, who would pay $22 more a year. Reduce the sales tax, and the same category of taxpayers would see a tax cut like everyone else.
Revenue Secretary Nick Jordan said the goal was to get what he called the “social engineering” out of state tax policy and put that money into specific programs that aid the least affluent. He also said the governor’s tax plan last year doubled the standard deduction for the head of household.
Jordan said the studies analyzing Brownback’s plan for cutting taxes do not consider the hundreds millions of dollars that the state spends on social service programs to help the poor.