(Syndicated to Kansas newspapers Feb. 29, 2016)
If there has ever been a ticking time bomb in the Statehouse, it’s a page and a half resolution that would let voters decide to eliminate the sales tax on groceries over the next four years.
Introduced by a dozen senators, the measure, if it passed the Senate and House, would go on the November general election ballot, just below the list of judges that some Republicans are hoping voters will stick around long enough to non-confirm.
You don’t have to be a fulltime politics watcher to know that if you can give voters a chance to eliminate that pesky sales tax on groceries, it’s going to pass. Who likes to pay sales tax on anything? Especially groceries?
It is that near-certainty that the resolution would be overwhelmingly approved that worries some legislators who don’t like the food sales tax, either, but are looking downstream of that vote to just how they balance the budget without that revenue source.
Practically, if the sales tax on food phase-out occurred, it would create a major cash shortage for the state starting on July 1, 2017, when the food sales tax rate would drop to 4% from the current 6.5%. That’s about $150 million in revenue loss in the first budget that the newly elected House and Senate would have to come up with—or cut from spending—in the first year of their new term. Second year of that term, and the revenue drops another $130 million or so.
That makes for a rough two-year House term, revenue-wise, and it gets a dab worse when the sales tax on groceries totally evaporates on July 1, 2019, for the last two years of those four-year Senate terms that will start after this year’s elections.
Sorta like staring to cook dinner while the attached garage is on fire…
And, while the House has a bill that would drop the sales tax on groceries by a smaller amount—to 2.6% and make up for the revenue shortfall by re-imposing the state income tax on non-wage LLC and small businesses—there’s a big difference between passing a law to cut food sales taxes and putting a ban on grocery sales taxes in the state constitution.
Yes, that’s a big difference…
But the House bill, well, it’s more controllable than a constitutional ban.
So, while the House considers what to do with its bill, and the Senate Tax Committee its constitutional amendment proposal, the bigger political choice is just where legislators want to leave their DNA on the issue.
Because, be assured, every vote on the Senate side, whether it is to consider the bill for a public hearing or voting it out of committee or forcing it to a vote in the Senate, will be tracked carefully: You can be sure that sometime this October or early November, you’ll get a phone call or a postcard or a card wedged into your screen door saying who voted for or against the food sales tax measures.
In the House, while the revenue cost of that food tax reduction will show up in slim budgets for the next few years, you have to believe that a yes vote for the littler bill will become a “why not let us voters decide the issue?” style campaign talking point.
Overall, the whole sales tax on groceries issue comes down to the governor’s championing of those income tax exemptions. Reduced sales tax revenue means that those 330,000-some Kansans who don’t pay state income taxes are likely going to wind up with a tax bill.
You gotta figure that without any state income tax to pay, those non-income tax payers surely have the gas money to get to the polls on Election Day. Probably in Buicks or better.