by Jennifer Rezac

  TOPEKA – The free-market grassroots group Americans for Prosperity-Kansas today released a study on the effects of cigarette taxes on the state's economy.

 The study "Masters of Tax Avoidance: Kansans and The Cigarette Excise, 1927-2009" by Patrick Fleenor, chief economist of Fiscal Economics, Inc., outlines the history of Kansas cigarette taxes and the results on the state economy.

 "This study clearly shows that raising cigarette taxes simply drives Kansas consumers to other states to purchase tobacco products," said AFP-Kansas state director Derrick Sontag. "It clearly results in lower cigarette tax revenues, not because more people are quitting, but because people go elsewhere to avoid paying those higher per-pack taxes."

 In 2002, Gov. Bill Graves proposed solving a large budget shortfall with a 65-cent increase in cigarette taxes.  After a legislative deadlock with lawmakers, a compromise 55-cent tax increase was passed.  Fiscal forecasters had predicted an initial drop in cigarette sales that would rebound the following year, but those projections were too optimistic.  In fact, sales taxes dropped by more than 20 percent in fiscal year 2003, and continued to fall another 5 percent in fiscal year 2004.

"It's obvious that raising cigarette taxes to help fund state programs has not provided the desired revenue stream to pay for these programs," said Sontag. " This isn't new information – cigarette taxes have led to numerous unintended economic consequences since they were first imposed in Kansas in 1927.

 "However, despite what history has shown us our Governor and legislators are still talking about cigarette tax hikes.

 "We hope this document will show to lawmakers that raising cigarette taxes is an ineffective deterrent to smoking and that it is simply unwise to fund government programs with revenue that is likely to dwindle once the new tax takes effect."

 The full study is available to download at: http://americansforprosperity.org/files/Kansans_And_The_Cigarette_Excise.pdf

{Flint Hills WICHITA} – Proposition K, the current initiative to revise the Kansas system for assessing property taxes, is constitutionally legitimate, according to "Constitutional Issues Impacting Property Tax Reform in Kansas" written by Caleb Stegall and published by Flint Hills Center for Public Policy. Stegall is a private constitutional attorney in Perry, Kansas and the 2nd Judicial District Attorney for Jefferson County. He has litigated numerous constitutional claims in both state and federal courts. 

1. On a specific date (January 1, 2010 in the legislation) current property values become fixed as the so-called “baseline value.”  (Property owners will always have the ability to appeal.)
2. Each property’s baseline value increases by 2% each year.  Properties never revalue for tax purposes unless substantially improved or altered.  Upon sale, the new owner inherits the annually-adjusted baseline value of the property.
3. To preserve fairness and promote simplicity, the plan applies to new construction, substantial alterations to existing structural improvements and re-classified land the average per-square-foot annually-adjusted baseline values of nearby properties.