Kansas Budget Raises Taxes by $1.2 Billion

This past weekend, Kansas approved a budget which will have serious impacts on the state's economy. The budget appropriates $15.6 billion over two years, raises individual income tax rates, eliminates certain tax exemptions for businesses, and creates a new tax bracket. The purpose of these measures was to plug a projected budget deficit of nearly $1 billion. However, the plan increases government spending in areas like education and transportation, and will increase the salaries of most state employees by 2.5 to 5 percent.

The decision to raise income taxes by $1.2 billion will directly impact the pockets of taxpayers. The tax will fill government coffers but lower consumer spending, investment, and savings by the middle-class. The reduction in consumer spending will pummel small businesses and job creators, which have created 98 percent of all post-recession private sector jobs. Businesses will end up feeling a double-whammy due to a loss of certain business deductions and lower store traffic.

Instead of raising taxes on taxpayers, the state government should focus on the main culprit of deficits: spending. Some will blame recent tax cuts as the reason for Kansas’ fiscal mess. However, these cuts on individuals and businesses have pushed unemployment to a 16-year low and small business openings are at historic highs. Tax increases coupled with additional government spending is not in the best interest of taxpayers, thus, NTU strongly opposes this budget.