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Advocacy is an important service that Business West members receive. That includes taking a stand on legislative issues.
Two unrelated matters before the Kansas Legislature were discussed at the recent monthly meeting of the Business West Board of Directors. The issues concerned tax deductions for those who purchase homes and reporting requirements for nonprofit organizations that take public money.
The Kansas Association of Realtors opposes Gov. Sam Brownback’s tax plan that would phase out state income tax. In order to balance the budget, the governor is proposing to eliminate the mortgage interest and property tax deduction for homeowners.
The Realtors argue that more than 417,000 Kansas taxpayers take advantage of the mortgage interest deduction; that averages about $390 annually in tax benefits. The Realtors cite the results of an independent poll the American Strategies conducted recently that showed more than 80 percent of Kansans believe that a mortgage deduction is a factor in buying a home. Likewise the poll indicated that 63 percent of Kansans oppose the governor’s plan when it comes to replacing the mortgage interest.
A spokesperson for the governor said his plan would create jobs, grow the economy, protect core services and reduce government.
Advocates for keeping the income tax argue that Kansas, like 42 other states, has a good balance among its taxing sources—property, income and sales. There are seven states that have no income tax—Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Gov. Brownback argues that Kansas will have a better chance to attract new businesses without an income tax.
Others argue that the seven states without income tax have several other reasons besides no income tax that they attract business. Florida, Nevada and South Dakota are major tourist destinations; they generate a substantial amount of sales tax. Alaska, Texas and Wyoming are major oil and mineral producers; a severance tax is a major reason they have no income tax. Washington does not have an individual or corporate income tax; however, all businesses must pay a gross receipts tax.
Those arguing for no Kansas income tax say it would help in attracting businesses that are in or are considering Kansas City, Mo. Those who favor the existing Kansas tax plan point out that independent rating sources such as Forbes and MSNBC have consistently ranked Kansas in the top 10 to 15 states to do business.
Nonprofit organizations, including Business West members, are concerned about House Bill 2188. The bill proposes that any nonprofit that accepts $350 or more during a year in state or local funds would have to maintain records of all its expenditures or a website.
A recent article in the Garden City Telegram quoted an executive director of a downtown association as saying it would be “…a bookkeeping nightmare.”
State Rep. Steve Brunk of Wichita introduced the bill. The genesis of the bill concerns difficulties in getting information from an economic development organization that receives money from the city of Wichita.
The reason that Business West is considering a stand on these issues is that quality residential housing has been a major focus and that about 10 percent of our members are nonprofit organizations.
The Business West Board of Directors has decided these issues are important enough to poll our members. Members will be asked to express their views on this legislation. The board will then decide what action to take.
Marisa Gray is the president of Business West.