The Kansas City Star, Jan. 20
Kansas Gov. Laura Kelly should abandon her proposal to impose sales taxes on Netflix and other digital streaming services.
Her misguided plan would hit Kansas consumers who buy books online, play games online, stream music, or subscribe to digital newspapers and magazines — that is, virtually everyone in the state.
The measure, which is part of Kelly’s 2021 budget that was released last week, would raise $26.7 million, starting in July, and another $6.7 million for local governments.
The governor’s staff insists the digital tax is not about money, but about fairness for sellers of physical books and DVDs.
“Kansas sales tax policy is antiquated, and as more and more items are being purchased online, we at least can level the playing field for existing Kansas businesses,” Kelly’s office said.
But the comparison is flawed. If you buy a movie at the store, you own the actual disc or videotape. That’s why those goods are taxable. Sales taxes apply to tangible personal property, which “has a physical presence,” the state’s own guidebook says.
By contrast, consumers don’t own streamed movies or songs. Digital providers are more like a service.
Some services are taxable in Kansas, but others, such as child care and snow removal, are not. Taxing digital streaming products will raise thorny questions about other services that should be subject to a sales tax, potentially adding to the tax burden.
There is no good explanation for why playing a video game online should be taxable while hair styling is not.
Kansas has been down this road before. Three decades ago, former Gov. Joan Finney, also a Democrat, proposed taxing dozens of exempt services such as legal work and accounting. Her effort collapsed in the face of bitter opposition from across the state.
Kansans will be no more enthusiastic about sales taxes on cellphone apps.
Questions about fairness go beyond services. Some tangible products are also exempt from sales taxes in Kansas, including farm machinery, broadcasting equipment and aircraft. If an audio book is subject to a sales tax, private jets should be, too.
But here’s the most important reason to oppose this plan: It extends the state’s unfortunate reliance on sales taxes to pay for government services.
We believe in fully funding the state’s schools. We support the expansion of Medicaid. We believe the state’s foster care system must be improved. All of those efforts, and more, cost money.
But broadening the sales tax isn’t the way to do it. In fact, Kansas’ unconscionably high sales tax on food must be reduced (Kelly’s proposed food sales tax credit of $1.15 a week for low-income individuals is insufficient.)
There’s a better option. The income tax rate in Kansas is still substantially lower than it was 10 years ago. The top rate today is 5.7%; in 2010, it was 6.45%.
Simply restoring the income tax to the 2010 level would provide Kansas with enough money to meet its needs, without taxing you when you subscribe to Spotify. Adding a fourth income tax bracket and raising taxes on wealthy Kansans might also do the trick.
Politicians are uninterested in income tax increases, of course, because they’re visible. Better, they think, to raise taxes on a digital subscription or an app — or a loaf of bread — by a fraction of a penny. No one will notice.
It’s cynical and wrong. Taxes should be fair, simple and low. The governor’s digital tax hike fails on all three counts, and it should be rejected.
The Lawrence Journal-World, Jan. 19
You can’t spell Kumbaya without KU. The recently released report by the University of Kansas’ Sorority and Fraternity Life Task Force serves as a reminder of that sentiment. The report hopes to convince you that all we need to do to make KU’s fraternity system safer and more responsible is to hold hands and sing a song.
One of the task force’s major recommendations is essentially to create another group and conduct more study. OK, creating a new group of fraternity, sorority, university and community leaders is fine. Good may come out of it. But the task force’s report, which took 14 months to complete, fails to make a key finding: Sometimes you don’t need to hold a hand; you need to slap one.
KU needs to become firmer in the penalties it hands down to greek organizations that don’t act responsibly. But before KU can do that it must first admit that it has severely mishandled fraternity discipline cases in the past.
That, however, is not a verse KU sings well. It has a hard time admitting its errors.
How KU has dealt with hazing and other incidents at the Delta Upsilon fraternity is a fine example of KU’s recent errors. This is the fraternity that somehow avoided suspension after KU officials found that in May of 2017 the fraternity had a wild spring break party that involved so much cocaine that the fraternity’s letters were drawn in the illegal drug. This was just 13 months after the fraternity had received a warning for hazing new members.
Then, just 10 months after the cocaine incident, the fraternity again avoided suspension after the university found it had tied a highly intoxicated member to the neighboring Delta Gamma sorority house’s decorative anchor. KU simply extended the fraternity’s probation, which obviously had done little to change the fraternity’s behavior.
It wasn’t until April 2018 that the university launched an investigation that ultimately led to the fraternity’s suspension from the university. It appears that investigation only happened because a parent of a pledge lodged a complaint. Never underestimate the power of parents. They apparently draw more attention from administrators than a kid tied to an anchor.
When the Journal-World in October asked KU why the list of Delta Upsilon violations hadn’t led to a suspension earlier, a spokeswoman said KU didn’t have a formal policy of “strikes” or “chances” when deciding to discipline a campus organization. Instead, “there is an ongoing conversation with Student Affairs leadership and with an organization’s national headquarters” about patterns of misconduct.
It was hoped that a disciplinary system of strikes and chances would be one of the recommendations of the task force. It was not.
Come to find out, it was even too much to hope that the task force would recommend that the university adopt hard standards related to illegal drugs and greek organizations. The university should have a policy that whenever KU authorities find evidence of illegal drugs as part of a sanctioned greek event the organization will receive an automatic suspension from the university community. While the issue of marijuana probably would be a lightning rod for activists, is it really too much to ask the university to adopt a zero tolerance policy for drugs such as cocaine, heroin, LSD, ecstasy and others?
The task force produced nothing close to such a recommendation. Thus, the odd question still hangs over KU: How much cocaine is too much to have at a frat house? A couple of grams? An ounce? A half-brick?
Maybe it can be one of the early agenda items for KU’s new group. In the meantime, please join hands.
The Topeka Capital-Journal, Jan. 16
If anyone went into Gov. Laura Kelly’s State of the State speech on Wednesday night expecting the governor to deliver something totally unexpected — breakdancing, perhaps, or an operatic version of “Old Town Road” — they were sorely disappointed.
But if they went into the speech expecting the governor to continue her familiar messages of rebuilding the state, making sensible financial decisions and praising compromise for the benefit of all Kansans, they hit the jackpot.
At this point, a year into her first term, the governor has settled on an image and message, and they both feel mighty reassuring. Her top priorities — signing Medicaid expansion into law, avoiding costly tax code changes and fully funding education — were much as they were last year and during her successful campaign. That’s because they’re popular among a broad, bipartisan swath of Kansans.
As Kelly noted on Medicaid expansion: “When we add this to our list of bipartisan accomplishments, we will not only save lives, it will close the book on a long, senseless, expensive political fight — making room to improve access to health care and grow the Kansas economy.”
The specifics, though? That’s where the challenges lie. Should the state’s pension debt be refinanced, easing up pressure on budgets in the near term? Should the lifesaving Medicaid expansion plan include a stringent work requirement? Should broadly popular tax cuts — such as reductions in the sales tax rate — be pushed aside for more targeted approaches?
Republicans and Democrats have very different takes on these specifics. Sometimes there are divisions within the parties themselves.
And there are broader questions, too, one that we don’t like to dwell upon. While Kelly talked about the toll of the Great Recession over the past decade, and noted Kansas’ current low unemployment figures, the state’s strength should make those long-term planners among us concerned.
A downturn will come eventually, with all of its attendant stresses. A recession will hit, and Kansans will suffer. It has nothing to do with personal morality and everything to do with a predictable business cycle. With that in mind, will we be ready? Will Kansas have rebuilt the infrastructure necessary to stand strong during the storm?
We hope that as Republicans and Democrats collaborate on the broadly popular initiatives suggested by the governor that they spare a thought for inevitable challenges beyond.