Fiscal Tornadoes in Kansas


Filed Under Latest News on Jun 3 

There’s a storm in Kansas, with howling winds and tornadoes ripping up the wheat fields and leaving devastation in its wake. Yes, it’s the Great Kansas Budget Crisis of Twenty Fifteen! Enormous tax cuts enacted by Gov Brownback back in 2012 – 2013 has slashed top state income taxes from 6.49% all the way down to 3.9%! That’s two and half percent! Ok, it’s about a 40% reduction in what was already a fairly low income tax rate. And at the low end of the income tax scale, it was reduced a little over 34% from 3.5% down to 2.3%. And some taxes on small business were eliminated. In the resulting shortfalls spending on some programs has had to be cruelly slashed by 4%. 4%!! And contributions to state pensions had to be trimmed slightly meaning the beneficiaries of those pensions have to invest a touch more of their own money into their future retirements.

Is this a true crisis? Or is this cooked up storm with it’s gnashing of teeth over education – itself the meat of a judicial battle between the state supreme court and the lower courts – and a few relatively modest cutbacks? Some school districts have had funding reduced and it seems the state government has had to slow down “funding increases for entitlement programs” in the words of the New York Times. Slowing down the rate of increase seems hardly a devastating cutback to entitlements. In fact, it’s not a cutback at all.

So the debate over how to save money seems to center on education, where funding has been selectively cut. And on how to get a little more out of slightly less. But education in Kansas seems to have an enshrined right to total spending goals that must be met, come hail, floods, locusts, or God forbid, tax cuts. Some GOP state lawmakers have complained that business has not moved quickly enough to their state in response to the tax cuts. Perhaps they should remember Reagan’s legacy: the one that lasted well into Bill Clinton’s presidency and did the hard work of providing the incentives for innovation that would later transform the economy in the 90’s. Supply side economics works, but over several political cycles. Gov. Brownback needs to prove that he’s as tough as he likes to look. And quick draw every liberal trying to exaggerate the shortfall in the hope of raising taxes to enable raising spending, to raise taxes to raise spending, and onward and upward in what is a true fiscal tornado. One that slowly twists and turns and sucks in everything in it’s path.