Monday, February 25, 2013

Revenue Secretary Jordan says Brownback cares about the poor

By SCOTT ROTHSCHILD, The Lawrence Journal-World

Gov. Sam Brownback's policies have frequently been criticized for hurting low-income Kansans.

On Sunday, Kansas Department of Revenue Secretary Nick Jordan sought to defend his boss, saying that Brownback is compassionate to the poor and that the governor gives money to homeless people on Massachusetts Street.

Jordan, who is Brownback's point man on tax issues, and state Sen. Tom Holland, D-Baldwin City, spoke on Brownback's tax policies during a moderated discussion before about 150 people at the Dole Institute of Politics.

Brownback's policies — cutting income tax rates while removing tax credits aimed at helping the poor — have been criticized as unfair to low-income Kansans.

In addition, in 2011, Brownback tried to shut down the state welfare agency office in Lawrence but then changed course leaving the office open.

But Jordan said Brownback cares about poor people.

"I've been here in Lawrence with the governor walking down Mass Street with him several times, and I've seen him stop and give the homeless people money and spend 20 minutes with them, talking with them, asking them what he can do to help them," Jordan said.

"I just want to say from my perspective, we've got a governor that is compassionate for the low-income people. I know that has been in dispute. I know the media many times have not painted him that way, but I've watched him," Jordan added.

Holland said the tax changes Brownback, a Republican, signed into law and the ones he is proposing during the current legislative session will cause significant budget cuts while shifting the tax burden onto low- and middle-class Kansans.

"I personally believe this is a tax plan designed to benefit Charles and David Koch and it will hurt everyday Kansans in the long run," Holland said, referring to the billionaire brothers who run Wichita-based Koch Industries.

Last year, Brownback signed legislation reducing personal income tax rates, increasing the standard deduction and eliminating the income tax for 191,000 business owners.

This year, Brownback has proposed a plan to phase out the income tax, but that first entails eliminating the mortgage interest and property tax deductions for homeowners, and keeping the state sales tax at 6.3 percent when it is supposed to fall back to 5.7 percent on July 1.

Holland said "this tax policy is supply-side economics in spades," designed by economist Arthur Laffer, whom Brownback hired last year as a $75,000 consultant on the tax plan.

Holland, the ranking Democrat on the Senate tax committee, said the theory is that states without income taxes are economically outperforming states that levy an income tax. But, Holland said, that theory dissolves when looking more closely at the states.

Alaska, Texas and Wyoming, for instance, receive a large portions of their tax revenue from oil, gas or coal. Florida has a booming tourism industry.

But Jordan said South Dakota, which has no income tax, doesn't have a large oil or tourism industry, but yet is growing much faster than Kansas.

"We've got to stop a declining economy in the state of Kansas," he said.

Jordan said reducing income taxes will cause businesses to expand and help the overall economy. He said much of the benefit from income tax cuts will help small businesses hire more people or buy more equipment.

During the question and answer session, one of the members of the audience asked Jordan to elaborate on Brownback's feelings for the poor.

Jordan said Brownback's Cabinet has worked putting together meals with the Salvation Army in Lawrence and often has a service project to help a charity.

But Holland said Brownback's tax policies are hurting the poor. Last year's tax bill eliminated property tax refunds for renters and the food sales tax rebate. Keeping the state sales tax at 6.3 percent will also hurt lower-income Kansans, he said.

However, Jordan said the state needs to remove "social engineering" from tax policy and fund specific programs to help the poor.