By MICHAEL STRAND

Special to The Hays Daily News

"Pray."

That was Edward H. Hammond's short answer when asked Wednesday what Kansans should do as the state continues to face tax revenue shortfalls, the result of an economy in decline.

The longer answer from the president of Fort Hays State University is more complicated, and involves a complete overhaul of the state's tax structure.

At its core is the elimination of all -- and he means all (as in "all") -- sales tax exemptions, on everything from farm machinery to Girl Scout cookies, that have been added to state law piecemeal over the past few decades.

Without those exemptions, he says, sales tax rates could be cut severely, and corporate income tax could be drastically reduced; those changes, in turn, would draw business to the state.

His plan, he said, would also allow property tax rates to be lowered, while still funding state services.

Hammond, who was in Salina on Wednesday as part of an annual statewide tour, acknowledged such a change would be difficult, but "in a crisis, you're not going to solve it by doing easy things."

Tax revenue estimates drop

On Wednesday in Topeka, Gov. Mark Parkinson said he's prepared to make additional cuts to existing budgets, should tax revenue estimates continue to drop.

The state generates new revenue estimates twice a year; the next such estimate is scheduled to be unveiled next week.

Tax collections for the past three months have been about 5 percent lower than was estimated in the spring.

To keep up with declining revenues, the state's higher education budget has been cut by about $100 million already, including $4.5 million from FHSU.

During an unrelated meeting Tuesday in Salina, members of the Kansas Board of Regents, including CEO Reginald Robinson and Chairwoman Jill Docking, recounted the same scenario as Hammond.

Higher education is working with a budget that's roughly the same as in 2006; overall, funding has dropped 20 percent in the past 20 years, while the number of students enrolled has climbed 13 percent.

Overall, the state's share of the cost of running the state universities has dropped from 47 percent in 1988 to 27 percent in 2008.

"For the first time, Kansas taxpayers are minority shareholders in higher education," Hammond said. "And it's at a time when the need has never been greater."

Enrollment is up

In a tight economy, Hammond said, more people return to school; enrollment at the state's six Regents universities is up 1,400 over last year, with 80 percent of that growth at FHSU.

That combination of decreased funding and higher enrollment "puts us at a crossroads between danger and opportunity. ... We could destroy higher education in the long-term, or position ourselves for success," he said.

Citing a recently released statewide poll conducted by the Docking Institute of Public Affairs at the university, Hammond said 91 percent of Kansans are opposed to further cuts in higher education budgets.

"I don't believe it's in Kansas' best interests, and I don't think it's what Kansans want," he said of the slow decline in state support.

If something doesn't change current trends, he said, FHSU and other universities face two choices. They could limit enrollment, as California has done, limiting Kansans' traditional access to higher education.

The alternative is "making cuts knowing it will affect quality; increasing class sizes, and hiring more part-time instructors instead of full-time professors."

Coming in a distant third on that list of two is raising tuition: "That would be one of the last things we would look at doing," he said.

Hidden cost

There's also a long-term hidden cost to tuition increases, Hammond said.

As tuition rises, students can simply borrow more money to pay -- but that eventually has to be paid back.

"If our graduates are paying off debt, they're not buying cars, they're not putting money into the economy," Hammond said. "All it's doing is taking money from our economy in the future. I don't expect kids to understand that -- but lawmakers should."