Downgrading Kansas

08/09/2014 7:10 AM

08/09/2014 12:10 PM

Gov. Sam Brownback thinks that two credit-rating agencies have downgraded Kansas because they “don’t like you cutting taxes,” and that a lot of Kansas Republicans voted against him and other incumbents Tuesday out of frustration with President Obama. Then there is reality, which apportions him some responsibility for the state’s fiscal trouble and his related unpopularity.

Brownback lost 37 percent of the primary vote, or 95,000 Republicans, to an unknown candidate – further indication that beating Democrat Paul Davis in November won’t be a cinch. Just as surprising was the governor’s remark to a Kansas City TV station about such GOP voters’ motivation: “I think it’s a lot of deep irritation with the way the president has taken the country. So much so that people are so angry about it they’re just trying to express it somehow.”

The electorate is disgruntled with incumbents – no question. But the governor’s record has invited discontent among Kansas Republicans, apart from their fear and loathing of Obama. And his administration’s tendency to blame the president for everything is getting silly.

Brownback’s more serious offense of political spin came Wednesday, after Standard & Poor’s downgraded Kansas’ credit rating to AA from AA-plus and its appropriation-secured debt to AA-minus from AA. S&P cited a “structurally unbalanced budget, following state income tax cuts that have not been matched with offsetting ongoing expenditure cuts in the fiscal 2015 budget.” Moody’s Investors Service made a similar move in April for similar reasons.

Yet the governor downplayed the downgrade. “We’re putting those dollars back into the economy and the bond rating agencies don’t like you cutting taxes,” he said. “We will repay the bonds to investors. These are still high-grade bonds.… It is hard cutting taxes, and we are doing it to create jobs.”

The problem for the agencies and, it follows, Kansas’ standing among investors is not tax cuts in general but the state’s 2012 income-tax cuts, which were unpaid for and unaffordable. Adjustments made in 2013 didn’t change that enough, and now Kansas’ plunging revenues are sapping reserves and squeezing the budget even as taxes are scheduled to go lower next year.

To hear conservative legislators and candidates talk about it, you’d think the answer is both obvious and easy – cut the budget. But Kansans deserve to know how and where, and with more specificity than the usual talking points about waste and inefficiency and the “proven” power of tax cuts to spur economic growth.

And with revenues having fallen off by design, where will the state get the means to respond to legitimate needs, some of them deferred by the recession? The state universities, for example, just outlined $190 million in funding priorities to the Kansas Board of Regents. And the big question of constitutionality of school funding is still pending at the Kansas Supreme Court.

In 2012 Brownback and his legislative allies clearly wanted tax cuts at all costs. Those costs now include downgrades in the state’s credit rating.

For the editorial board, Rhonda Holman

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