Tax council testimony: Kansas sales tax burden creates regressive system

By: - December 20, 2021 6:07 pm

Following her presentation for the tax reform council, Donna Ginther, director of the Institute for Policy and Social Research at the University of Kansas, answers questions Dec. 17. (Screen capture/Kansas Reflector)

Nearly 38% of Kansas’ tax revenue comes from sales taxes, according to Donna Ginther, director of the Institute for Policy and Social Research at the University of Kansas. 

“Kansas taxes are regressive because of our over-reliance on the sales tax,” Ginther said Dec. 17 at the last meeting of the Governor’s Council on Tax Reform. “Axing the food tax will reduce some of that regressivity, and it’s important to note that local sales taxes were put in place because of high property taxes. Local sales tax levies are there to keep property taxes from rising too quickly.”

Only 12 states tax food, and Kansas comes second in taxing food at a high rate, with only Mississippi going higher. A former student of Ginther, Kegan O’Connor, conducted a study that shows states that reduced the food sales tax experienced a 39% decline in food insecurity.

A four-person household earning $25,000 per year would spend 29% of that income on food. However, a four-person household earning $150,000 yearly only spends about 6% of total income on food, according to Ginther.

“Having the capacity to look at different hypothetical constituents at different income levels in Overland Park and Scott City and Salina is really a breakthrough,” said Chris Courtwright, former principal economist for the Kansas Legislature. “I think a lot of the policymakers in the branch of government where I used to work would view that as a valuable tool.”

Both Kansas Gov. Laura Kelly and her likely opponent in next year’s Kansas gubernatorial race, Derek Schmidt, have called for eliminating or substantially reducing the state’s tax on groceries.

The tax reform council was formed in 2019 by Kelly to encourage more responsible tax policies.

“The (former Gov. Sam) Brownback tax cuts did not lead to economic growth,” Ginther said. “Instead, the state ended up disinvesting in the state itself and created challenges with our antiquated unemployment insurance system and a significant underinvestment in broadband infrastructure.”

Kelly said that through the council, Kansas has been able to restore funding for education and highway programs.

“When I took office, I knew that that destructive pattern had to be erased,” Kelly said at the final meeting. “We ushered in a new era of fiscal responsibility, and thanks to our diligence, but with your guidance and your recommendations, we have put together a balanced budget. We have restored funding for critical services, including fully funding education for the first time in a decade.”

Though concerns remain, the future of the Kansas economy is looking bright, Kelly said.

“We’ve achieved tremendous economic growth and attracted record business investment putting us in much better financial position than we were pre-pandemic,” Kelly said. “In fact, we have the largest ending balance ever, which gives us flexibility to address some longstanding needs and now we have the opportunity to make a major impact on the lives of every Kansan.”

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Margaret Mellott
Margaret Mellott

Margaret Mellott is a recent Emporia State University graduate of communication and journalism. During their time at ESU, they spent all four years on the campus paper, The Bulletin. She also spent one year with The Campus Ledger at Johnson County Community College. Outside of collegiate journalism, Mellott has also worked on projects for Vintage KC Magazine and Humanities Kansas.