Tax law changes defended

By Bryan Richardson

“Kansas is open for business.” That’s the message state commerce secretary Pat George is trying to convey through a series of meetings with business interests.

George, along with revenue secretary Nick Jordan and labor secretary Karin Brownlee, visited Manhattan Tuesday morning for the first stop of what they are calling the Kansas Small Business Empowerment Tour.

The tour, which continues through Wednesday, will also make stops in Norton, Hays, Dodge City, Hutchinson, Wichita and Independence.

Picking up on a theme enunciated Monday by Gov. Sam Brownback, the secretaries touted the tax reform passed earlier this year by the state legislature as one of the ways to grow the business community.

Starting next year, income taxes will be eliminated for about 191,000 small businesses. The tax reform also reduces income taxes from the current three-bracket rates of 3.5, 6.25 and 6.45 percent to 3.0 and 4.9 percent.

The secretaries said the tax reform is needed to draw more businesses and residents into the state.

Jordan said the state lost $1.9 billion in tax dollars over the course of 10 years due to people leaving Kansas. He said Texas represented the number one state people left for.

He said tax reform and the Rural Opportunity Zones, which consist of 50 counties, will help the state recoup those losses and grow. New full-time residents within those zones can apply for income tax waivers for up to five years and student loan repayments up to $15,000.

Brownlee said Kansas ranked 18th in over-the-year job growth between July 2011 and July 2012, an improvement from 48th over the previous 12 months.

Legislative researchers project the tax reforms will create a cumulative shortfall of more than $2.5 billion over five years. State agencies have been told recently by state budget director Steve Anderson to propose 10 percent cuts in their fiscal year 2014 budgets. But Brownlee said she believed that service levels can be maintained if managed properly.

“The burden is on us and our colleagues to manage our agencies to give you the best service at the best cost,” she said. Brownlee cited the labor department reducing its workforce from 615 employees in January 2011 to 415 employees currently.

Among those in attendance were Reps. Richard Carlson, Sharon Schwartz, Sydney Carlin and Vern Swanson as well as 22nd District Senate candidate Bob Reader.

Swanson said he hasn’t heard from small business owners he spoke to about jobs being added. In response to that, Jordan told him to think of the issue in terms of macro (Kansas) rather than micro (a town).

George said not every business will expand in jobs, but their purchases of equipment could create jobs for the manufacturer.

“We hope that the private citizens with money left in their pocket will go out and invest that money whether it is in a business or purchases of other items,” he said.

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