Dear Chamber Members,

As you know, our Chamber 2010 legislative agenda priority is to hold the line on taxes. The Chamber’s long-term goal is to improve the overall tax structure in the state of Kansas. This year in Topeka, we have fought to reduce the unexpected increase in unemployment insurance for our members and encouraged legislators to not increase taxes.

In the past few days, there have been several reports touting the Governor’s “temporary one cent” sales tax increase as the only option to close the budget deficit. The one cent sales tax would represent an 18.7% increase over the current sales tax rate of 5.3%. The Governor’s budget plan which requires that taxes be raised will be an increase in State General Fund (SGF) spending. Without his increase in spending, the budget would only require cuts in the approximate range of $175M post Consensus Revenue Estimating Group (CREG) numbers. We believe there is absolutely nothing in the Governor’s proposed budget to suggest that any tax increase would be temporary. During the state’s last economic downturn the legislature raised the sales tax by one cent. It did not go away.

The Governor’s budget is actually an increase of nearly a half a billion dollars over last year’s budget. Increasing State General Fund (SGF) expenditures from $5.4B to $5.8B is not cutting the budget. From 1993 to 2009, SGF spending has increased over 2.25 times or 125%, while inflation for the same period was only 43%. This is an unsustainable pattern of growth perpetuated by inefficient state governance. In the last five years, two of which were recessionary, SGF spending increased by 40.5% while revenues grew at 23.6%. While revenue outpaced inflation, state government still outspent receipts. Simply put, you would be out of business if you followed that example.

You, our Chamber members, large and small, employ thousands of people throughout South Central Kansas. The jobs you provide and the wages you pay fuel our state’s economic engine. You wrestle with keeping and creating jobs in South Central Kansas, as well as supporting a strong public education system and safety net programs for the less fortunate. Businesses pay their taxes and employ people who, in turn, have good jobs and pay taxes that supply the funding we need for solid state infrastructure, social service programs, and a strong public education system. We are deeply concerned about maintaining a competitive business environment that encourages job growth.

Like most Kansans, we are fearful that the funding needs for our roads, police and fire, social services and public education systems will not be met if we don’t take care of Kansas businesses. In all our Chamber meetings, we have heard one resounding message: a tax increase at this time would have a devastating impact on our members and lead to additional job losses and business closures. This would only exacerbate the state’s financial problems and lead to even more tax increases. As a state, we cannot afford to continue this downward spiral.

In March, we commissioned a survey of businesses in the five-county region including both chamber members and non-members. I have included the survey information for you in our “Issue Alert.” The media and legislators will receive this information in the form of a news release later today. As you will see, this survey reflects the sentiments of business and the strong preference for cutting government spending to deal with the budget shortfall. Thank you for taking the time to review the poll.

If you have questions, please contact Barby Jobe at 316.268.1152 or Jason Watkins 316.461.8112 in our government relations division. We will continue to improve our business environment for you in order to make Kansas a place for business to flourish.

Sincerely yours,

Sam Williams
Chairman of the Board
Wichita Metro Chamber of Commerce
 

The Legislative Agenda of the Wichita Metro Chamber this year is to keep Kansas competitive and business friendly. With the addition of our new lobbyist, former representative Jason Watkins, we intend to aggressively pursue legislative priorities that benefit our members. We all understand the critical budget situation our state faces and we also understand that many policymakers in Topeka are looking to raise taxes. We know that raising taxes will not benefit our business members, so our first priority for 2010 is our belief that we must hold the line on taxes. We want the Wichita metro region and Kansas to be competitive and business friendly and we can’t do that with increased taxes. The elimination of certain tax exemptions and credits would in effect be a tax increase. At this time, our businesses cannot afford any increase in taxes -- layoffs, earnings and state tax receipts certainly reflect this truth.

Second, we are in support of the Unified Legislative Agenda – as usual, it includes issues critical for our region. A couple of issues included are continued funding for NIAR, NCAT and Affordable Airfares. NIAR and NCAT are critical to our aerospace industry – a huge resource for our state. Despite layoffs, the aviation manufacturing cluster still employs thousands of Kansans and still contributes over 20% to the State General Fund. Affordable air service to Wichita is absolutely essential to all business operations. Without affordable air service we lose not just large employers, but we also lose the up and coming high growth employers that will sustain our future. The Affordable airfares program has provided a $105 million return on investment over the past four years to the State General Fund. During this time, the state has invested $20 million and for every dollar invested the state receives $5.25 back.

Finally, we want to ensure that our region receives equitable funding for economic development projects. The Chamber, Visioneering Wichita and REAP (Regional Economic Area Partnership) have provided a brief Economic Development Report for our south central Kansas legislative delegation. There is a huge disparity in what South Central Kansas contributes and receives for economic development projects compared to other regions in the state. The Chamber intends to work together with our legislators to address and remedy this problem.