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Wednesday, July 23, 2014

Brownback enters session with ambitious agenda

BY BRENT D. WISTROM
Eagle Topeka bureau

If Gov. Sam Brownback’s year goes as planned, people in Kansas will pay less income tax, schools will start finding new ways to serve their poorest kids and social services will nudge more people toward family life and off the public dime.

But that’s according to a plan that may be difficult to follow in a building filled with politicians.

The Republican governor, who was elected in 2010 with 63 percent of the vote, has already made his mark by shrinking government and advocating conservative policies. Now he is entering the prime of his first term. The aura of past governors has faded. He is backed by a mostly unstoppable majority in the House. And his conservative allies have targeted moderate Republicans who have balked — if only slightly — at his ideas.

Those advantages could be weakened if lawmakers get hung up in redistricting debates and election-year politics in the Senate.

Brownback has proposed major overhauls to several cornerstones of state government: the tax code, the school finance formula, the state pension system and Medicaid. Meanwhile, he’s also hoping to advance new policies that encourage responsible fatherhood and promote marriage.

He said he doesn’t think his agenda is too much for the Legislature to handle in the session that starts Monday. But he acknowledged that some things may go more slowly than he and his supporters had hoped.

“You’ve got a delicate balancing act,” the governor said, sitting in his office in the Capitol. “You’ve got to pay for your schools and get your taxes down. You’ve got to pay for your public health and pull your tax rates down at the same time.”

He’s demonstrating some flexibility.

“He’s got a big agenda on the one hand, and it’s certainly very aggressive,” said Burdett Loomis, a political science professor at the University of Kansas, who worked as then-Gov. Kathleen Sebelius’ director of administrative communication in 2005. “But I think there are indications that he’s trying to become more savvy about governing.”

When media reports surfaced about the diploma-mill degree of Brownback’s new appointee for chief information technology officer, a resignation announcement followed within days.

When his administration faced criticism and jokes across the nation after his staff told school officials about a high school girl’s critical (if not comical) Twitter message, Brownback apologized on his staff’s behalf.

Last month, when Republican lawmakers were dismayed with a Brownback appointee’s idea to shift juvenile justice programs under the Department of Social and Rehabilitation Services, where for years the system seemed broken, Brownback’s administration said the issue is open to further study.

Shortly thereafter, Rob Siedlecki, perhaps the most controversial member of Brownback’s cabinet, announced he would resign and return to Florida.

“There’s a lot of harsh realities there you have to deal with,” Loomis said. “If he’s going to be a presidential candidate sometime in the future, he has to govern a state that actually works.”

But Brownback, who briefly campaigned for the 2008 Republican presidential nomination, says that’s not on his radar. He said during an interview with Eagle reporters and editors that he had no regrets about not running for president again during this election cycle.

“I’m a happy camper,” he said. “I’m delighted to be a governor. I’m delighted to be out of Washington.”

But he made a trip to Iowa to promote Texas Gov. Rick Perry for president about a month later.

‘Bleeding taxpayers’

It’s not just Rick Perry that has Brownback thinking about Texas. It’s also taxes.

He has pointed to Texas and several other states that don’t have individual income taxes as an example of how leaving more money in people’s hands can spur growth. And he repeatedly cites IRS data that he says shows Kansas is “bleeding taxpayers” to other states with lower income tax rates, including Texas and Washington, although he acknowledges the data doesn’t show people’s motives for moving.

Brownback hasn’t shared any details of his tax plan publicly. And his administration has resisted inquiries into the specifics about who has influenced the forthcoming policy, though Arthur Laffer, the architect of supply-side economic theory and former economic adviser for President Ronald Reagan, has been a consultant to the administration.

But Brownback’s comments have centered on reducing individual income tax rates, eliminating income tax exemptions and credits, and removing what he calls “social engineering” from the tax code to make it flatter and fairer. And he says his proposal won’t require an overall reduction in state spending. Instead, it appears he plans to dial the tax downward by using any new revenue generated by growth to prop up more room for income tax reductions.

In his December interview with The Eagle, he said the policy he plans to pitch Wednesday evening in his State of the State address will be something average Kansans will notice in their pocketbooks.

“We’re bleeding taxpayers. We’ve not grown private-sector jobs. We lose taxpayers to all of our surrounding states except Nebraska,” he said. “We’re not healthy performance-wise for our overall economy in the region.

“If you try to put us on a competitive scale like you do sports, and you’re comparing to your league that you’re in … We’re not performing well in our league. We’ve got to do better.”

Reducing income tax burdens on people and small businesses would spur growth and create jobs, Brownback said.

Chambers of commerce and business groups strongly back income tax cuts. But Democrats and some economists worry that cutting the state’s primary source of revenue could result in reductions to state services, particularly those that serve the neediest. They say it’s not fair to compare Kansas to oil-rich states like Texas because they can draw on natural-resource taxes to pay for services and sometimes have higher property or sales taxes.

Brownback could likely move his tax proposal through the House. But the Senate last year let die in committee a bill that would have phased out individual income taxes. And eliminating the individual income tax — which contributed $2.4 billion, or 46.6 percent, of the state’s revenue in 2010 — would require big cuts in spending or massive growth.

Brownback said the economy would need a significant boost in order to make big changes in a short time. That seems unlikely.

“You’ve got to do these things in a sensible fashion where you can fund your basic needs of state government but get yourself somewhere on down the road,” he said. “A lot of times you can’t do it in a short time frame.”

How much change is possible?

Senate President Steve Morris, R-Hugoton, said he expects several tax plans. He set up a bipartisan study group headed by Sen. Les Donovan, R-Wichita, to delve into the details of each tax plan to make a recommendation to the Senate tax committee.

“Half of the state’s income comes from income tax. So to replace that if you have to go to a very high rate of sales tax or increase property tax significantly, I would be very surprised if the senators of Kansas would be receptive to that.”

He noted Texas gets a lot of its revenue from oil and gas.

“We get a little, but nothing like that,” he said. “It’s not comparing apples to apples when you hear that comparison. That’s not to say we can’t make changes in our tax policy.”

Kansas estimates it will get more than $200 million more in revenue than had been projected, providing a thin cushion in budgeting.

“However, that doesn’t relieve a lot of the pressure,” Morris said. “If you look cumulatively over the last two or three years, we’ve cut $2 billion from the budget. That’s a lot of money.”

Brownback, meanwhile, has voiced consistent optimism about the state economy. He has said the state’s wind energy industry will double by 2013, and he has pledged to aggressively pursue commercial aviation business, especially after Boeing’s announcement that it will leave Wichita.

He is expected to announce in Wichita on Tuesday details of an incentives agreement between the state and Bombardier’s Learjet facility, according to a source. The agreement will help with a $52.7 million expansion project that will mean 450 jobs at the plant.

House Minority Leader Paul Davis, D-Lawrence, said Brownback’s tax plan has been developed in secret and deserves a lot of scrutiny once it’s revealed. But he sees potential for changes in taxes, particularly with the dozens of exemptions and credits that litter the code.

Regardless, he said, each bit of tax code has a constituency, making it difficult to change.

“I’ve found that’s a politically difficult thing to do,” he said. “I think the governor is going to discover that once tax law is on the books, it is very, very difficult to change.”

Davis, who with other Democrats presented a 14-bill job-creation plan that largely hinges on opening a new casino in southeast Kansas and allowing slot machines at race tracks, said redistricting, changes to school finance and other issues could easily bog down Brownback’s agenda.

“I think he’s going to discover the Legislature can only tackle so many major issues,” he said. “I think it may be a little bit too much for the legislative appetite.

“But whatever you think about him, he certainly is trying to shake things up.”

Reach Brent Wistrom at 785-296-3006 or bwistrom@wichitaeagle.com.

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