March 4, 2024

Keeping Media and Government Accountable.

What is Gov. Kelly’s Department of Revenue trying to hide?

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The Kansas Department of Revenue is ignoring an Open Records request, in what could be an attempt to cover up their misrepresentation of state revenue estimates to legislators.

Earlier this month, Kansas Policy Institute (the Sentinel’s owner) sent an Open Records request to KDOR Secretary Mark Burghart for documentation to support the claim that Kansas would lose $359 million in tax revenue.  A memo jointly signed by Burghart and Budget Director Adam Profitt said their November estimate presumed business expenses paid with Payroll Protection Proceeds would not be deductible, but now will be due to a December Congressional action.  As a result of that Congressional action, KDOR claimed revenues would be $359 million lower than predicted over the current fiscal year ending June 30  and the next two fiscal years.

They told this to Legislative leadership on March 30 (coincidentally, of course), shortly before Governor Kelly vetoed income tax relief in Senate Bill 50 as being fiscally irresponsible.  But for KDOR’s claim to be true – that revenue would be less than estimated in November – revenue estimates from last April or November should have reflected an equal increase.  Payroll and other expenses have always been deductible, so KDOR would have to increase tax revenue estimates at some point in the past to account for any such change before they can legitimately reduce revenue estimates.  In other words, one cannot remove something that wasn’t there in the first place.

But there is no mention of revenues being increased for that reason in the April 2020 or the November 2020 estimate reports.

The case for a cover-up

The KORA request for a copy of the memo and the calculations to substantiate the initial increase was submitted one week after their March 30 memo.  KDOR acknowledged receipt, writing that they would let us know by May 19 if they possessed the requested information.

If the calculations exist, it would take but a few minutes to send them.  But saying they will wait until May 19 to tell us whether they have the requested information could very well indicate that they don’t want to admit that no such calculations exist. It could further indicate that there was no basis for their March 30 declaration but are hoping to cover that up until the legislative session ends.

The April 20, 2021 revenue estimate report further supports the possibility of deception and cover-up.  For this and the next fiscal year (ending June 30), KDOR increased the tax revenue estimate by $342 million, and again, there is no mention of an adjustment for PPP-related expense deductions.

It begs credulity that KDOR could believe revenue to be $359 million too high on March 30, and then $342 million too low on April 20.

Stand up for taxpayers

At the same time Governor Kelly is denying citizens of tax relief (and possibly not being honest with them), the State of Kansas is set to collect $1.6 billion in additional federal funding from COVID stimulus spending; cities and counties will get another $1.1 billion.  That’s all in addition to the $1.25 billion collected last year.

Legislators can stand up for taxpayers by overriding her veto of SB 50.  They can also earmark a large portion of the windfall going to cities, counties, and the state to provide compensation for people and businesses who suffered economic, emotional, and educational consequences over the last year.

The simplest way to do it is to rebate a portion of everyone’s property tax.  Sharing half of the combined $2.7 billion windfall with taxpayers seems like the fair thing to do.


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