June 1, 2012


Attorney: Tax Cuts to be used as Evidence Against State

by Peter Hancock l The Kansas Education Policy Report

(May 29, 2012) Attorneys for the plaintiffs in the upcoming school finance trial plan to use the Gov. Sam Brownback’s recently enacted $4.5 billion tax cuts as evidence to show the state of Kansas actually could have provided more funding to public schools, if the legislature and Gov. Sam Brownback had chosen to do so.

The trial in Gannon vs. Kansas is scheduled to begin Monday, June 4, before a three-judge panel sitting in Topeka.

(Download plaintiffs’ petition at http://www.robblaw.com/PDFs/2011-12-02%20Amended%20Petition.pdf)

John Robb, lead attorney for the plaintiffs, said his team is not challenging whether the legislature had authority to pass the tax cuts. Rather, he said, data about the impact those cuts will have on state revenue will be used to challenge part of the state’s defense, which claims that the state simply could not afford to increase spending on public schools.

So far, lawyers for the state have not disclosed many details about the defense strategy they plan to use. But court records indicate they plan to call Dr. Art Hall, director of the Center for Applied Economics at the University of Kansas School of Business.

Hall’s written report (http://ksedpolicy.com/blog/wp-content/uploads/2012/Documents/Gannon/StateExpertReport-Hall.pdf), which was submitted to the court in March, argues that dramatically increasing K-12 state funding would have an adverse impact on the Kansas economy by forcing tax increases and/or spending cuts in other areas of state government.

Last week, Brownback signed into law SB 2117 (http://skyways.lib.ks.us/ksleg/KLRD/2012ConfCommRpts/ccrb_hb2117_01_0000.pdf), a bill that cuts state taxes by an estimated about $4.5 billion over the next six years. The new law lowers income tax rates for wage earners and eliminates taxes altogether for non-wage income derived from certain business entities.

The Kansas Legislative Research Department estimates that could force upwards of $2.5 billion a year in spending cuts by 2018, or roughly 40 percent of current state general fund spending.

Brownback, along with other supporters of the plan, say the tax cuts were needed to spur economic growth and new job creation. Brownback has asserted that the cuts will result in “tens of thousands of new jobs” being created in Kansas.

Robb, however, said the Kansas Constitution mandates adequate funding for public schools. There is no such mandate, he said, for drastically cutting state revenues, no matter how desirable or economically beneficial the governor and lawmakers think those cuts may be.

© 2012, Hancock Publishing Co. All rights reserved. Reposted here with permission.