By TIM CARPENTER
Kansas Reflector
TOPEKA — The Kansas Chamber’s wish list for the legislative session that opened Monday features corporate and individual income tax cuts, a blockade on local government bans on plastic bags and regulatory changes to deliver regionally competitive energy costs.
The organization proposed lawmakers help fill gaps in the state’s workforce with a tax credit for companies hiring apprentices. If the Kansas Chamber could wave a magic wand, it would eliminate a state ban on retailers passing credit card fees to consumers, slash the state’s general sales tax of 6.5% and declare the legislative branch — not the judicial branch — the final authority on funding of K-12 education.
Other policy goals: support reforms to help people with criminal records land a job, amend the workers’ compensation system to limit pain-and-suffering damage awards to injured workers and give parents more opportunity to direct state tax dollars to private school education of their children.
“Our regulatory climate has improved and our employment laws are among the best in the nation,” said Alan Cobb, president of the Kansas Chamber. “Unfortunately, the work is not done. Actions taken by other states have made them more attractive to investment and to workers. We must act to become competitive.”
The Kansas Chamber, which has a political action committee that invests primarily in conservative Republican candidates, maintains a steady presence in the Capitol. The objective is to provide traction for “pro-business” legislation through direct lobbying, testimony on bills, drafting of legislation and behind-the-scenes negotiation on public policy. Generally, the organization embraces principles of free enterprise, small government, economic development and job creation. The bottom line: Lower the cost of doing business in Kansas.
Cobb and Eric Stafford, the Kansas Chamber’s top lobbyist, sat down with the Kansas Reflector podcast to walk through key elements of the organization’s 2023 legislative agenda.
“We need to become more competitive. We need to grow. We need to attract more business investment. We need to attract individuals here. And, it’s not just necessarily income taxes. We’re the sixth highest cellphone tax burden in the nation?” Stafford said.
Taxation theme
Polling by the Kansas Chamber showed seven of 10 chief executive officers of businesses believed the property tax burden in Kansas was too high.
Some states made use of large state revenue surpluses by lowering income tax rates, but Kansas has not taken that step. The organization intends to pressure the Legislature to curtail both the individual income tax burden on Kansans by adopting a flat rate. The Kansas Chamber is working on legislation would earmark projected growth in state revenue for buying down state income taxes.
In addition, the Kansas Chamber proposed an across-the-board reduction of the state’s 6.5% sales tax. On Jan. 1, a law adopted by the 2022 Legislature and Gov. Laura Kelly reduced the state sales tax on groceries from 6.5% to 4%. General purchases of goods is still tied to the 6.5% state rate and whatever percentage was imposed by cities or counties. The average total sales tax in Kansas is 8.4%, but in some jurisdictions it tops 10%.
“We are either seventh or eighth highest in combined … state and local tax rate in the country. I mean, it’s good to be in the top 10 generally. That’s not one of them,” Cobb said.
Stafford said there was reason to be optimistic about the Legislature and Kelly reaching compromise on a broad tax bill that included the immediate elimination of sales tax on food.
“It’s a very realistic possibility it could happen,” he said, “but I also think it’ll be part of the bigger tax conversation. You know, Governor Kelly ran on commercials that she’s in the middle of the road. Well, you know, there’s going to be a time where the art of compromise isn’t getting only what you want. It’s giving up some things that you might not be crazy about.”
Stafford said there would likely be bipartisan support for adopting tax credits for businesses that participated in registered apprenticeship programs in traditional trades as well as education, information technology or health care. Under the Kansas Chamber’s proposal, the state would offer tax credits of $1,250 per apprentice up to 10 at each company.
K-12 education
The Kansas Chamber’s policy agenda waded into K-12 public education to include deploying state tax dollars for schools operating outside of the public education system. It’s controversial because some lawmakers believe a voucher-like system drained the best students and more resources from public schools, while proponents point to the need for educational alternatives best suited for the student.
“We need better students,” Cobb said. “We don’t care whether they’re homeschooled, private schools, parochial schools, religious schools or public schools. We need all of them to succeed. Competition works everywhere. We’re all of the above. It’s not terribly complicated.”
In addition, the Kansas Chamber would like the Legislature to be the final authority on determining appropriate levels of state funding of K-12 schools. In the past, the Kansas Supreme Court has found state aid to schools unconstitutional. Rulings have prompted increases in state aid to public education.
Stafford said the Kansas Supreme Court’s decision to strike down caps on pain-and-suffering awards to injured workers was bad public policy. The constitution ought to be amended to allow the Legislature to adopt award limits for noneconomic damages, he said.
“The Legislature felt it was the best public policy for the state to have that in place. And our Supreme Court came in and said, ‘Nope, those are unconstitutional. You can’t do that.’ We do support reinstating caps on economic damages. About the only approach that we have left at this point is a constitutional amendment.”
Cobb said the Kansas Chamber would support legislative efforts to do away with the penalty of five days in jail for a first offense for driving a vehicle on a suspended license.
“Driving while suspended. Five days in jail. We got to change that. I mean, five days in jail if you’re convicted of driving while suspended?” he said.
Stafford said the organization had long opposed a patchwork of regulations by cities and counties regarding use of plastic bags commonly used in retail stores. This year, however, the agenda was widened to include opposition to local units of government forbidding sale of dogs and cats at retail stores, he said.