While many other states are enjoying budget surpluses, Kansas stands out for trying to pull together just enough cash to get by in the wake of the revenue falloff caused by the income tax cuts.
So Gov. Sam Brownback’s two-year budget proposal, released Friday, is an unattractive mix of tax hikes, fund raids, flip-flops and “efficiencies” designed to facilitate the governor’s State of the State vow that “we will continue our march to zero income taxes.”
Even so, in an effort to plug a $648 million hole next year it would slow down additional scheduled tax cuts – a move that to all but the administration bears a strong resemblance to the proposal made by Democratic opponent Paul Davis last fall that the Brownback campaign had called “appalling.”
The plan’s success will depend on several things. Among them:
▪ Whether conservative Republican lawmakers sworn to never raise taxes can be persuaded to do just that. Brownback wants steep increases in the state taxes on cigarettes, other tobacco products and liquor, in an effort to generate $107.9 million more in fiscal 2016 and $104.1 million more in 2017. Can he make the case that it’s OK to raise “sin” taxes in the name of lower income taxes? The governor also wants to accelerate the elimination of some income tax deductions, including the one for home-mortgage interest – another tax increase for many.
▪ Whether local governments and pro-highway business interests will sit still for more diversion of funds from the transportation plan, or have had enough with $1.2 billion in highway fund transfers since 2011 for general state operations. Brownback also would dip into more tobacco-settlement millions earmarked for children’s programs. (As Kansas Action for Children tweeted Friday, “Kids pay for tax cuts.”)
▪ Whether legislators are willing to undermine their efforts to improve the long-term funding of the state pension system. Under Brownback’s proposed changes, the state might issue $1.5 billion in bonds or reduce its contribution rates in ways to save $132.4 million over two years but also push off the day when the system’s solvency is assured.
As a short-term and shortsighted correction for a fiscal course that never should have been taken, Brownback’s plan is better than it might have been.
While continuing the 4 percent cut to state agencies he imposed last month, the proposal doesn’t go out of its way to target K-12 public education – though the governor’s stated desire to repeal the school-finance formula should give districts, teachers and parents plenty of concern.
If the governor has put forward a budget that works on paper, legislative blessing is hardly guaranteed. He’ll need tax collections to come in close to projections, and the Kansas Supreme Court to take its time deciding the appeal of the lower court’s ruling that the state is badly underfunding schools.
So the “real live experiment” continues. Forget investing in the future, or even restoring the spending levels slashed in the recent past. These days Kansas’ government is too burdened by fiscal difficulties to aim for any stars.
For the editorial board, Rhonda Holman