Kansas needs to rebalance its income, sales and property taxes in the wake of revenue shortfalls created by massive income tax cuts, the president of the Kansas Farm Bureau said Tuesday.
Rich Felts, who took over as president of the state's largest farm organization in December, said he worries that property taxes may take the brunt of hikes in the waning days of the legislative session as lawmakers struggle to close the budget hole. While a proposal that would have dramatically increased property taxes on Kansas agricultural land appears dead for now, farm leaders are warily eyeing whether property tax hikes will resurface as an amendment to a bill.
The GOP-dominated Legislature must close a projected budget deficit of nearly $600 million for the fiscal year beginning July 1. The shortfall arose after lawmakers aggressively cut income taxes in 2012 and 2013 at Republican Gov. Sam Brownback's urging to stimulate the economy. One policy exempted 53,000 farmers from income taxes, along with the owners of 281,000 other businesses.
Brownback has proposed backing off future income tax cuts that have been promised and raising tobacco and alcohol taxes. Legislators are considering those ideas and a wide variety of other options.
For years, Kansas had "a three-legged stool" of income, sales and property taxes that worked until the income tax cuts, Felts said.
Felts stressed that his statements reflect only his personal opinion because his organization did not take a position on the income tax cuts when members met last December. Its members didn't realize at the time the extent of the looming shortfall, he said.
The official Kansas Farm Bureau policy opposes any increase in property taxes, and the group in general is not in favor of raising taxes. Felts said he could see the organization saying at some point that the state needs to rebalance the tax structure.
"It is an issue we need to address," he said.
Felts farms 3,000 acres of wheat, corn and soybeans and raises 4,000 hogs in Montgomery County in southeast Kansas. As a limited liability corporation, or LLC, he pays no state income taxes on his farming operations, nor does he pay sales taxes for the fertilizer, chemicals and seed he buys to put in a crop.
But he said anybody who thinks farmers do not pay their fair share of state taxes should see his annual property tax bill of $27,000.
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