The $300 million state budget shortfall is daunting enough. But pulling the state’s finances out of peril demands something more than the one-time tricks proposed Wednesday by Gov. Sam Brownback’s office.
Remember that the best-case scenario of the governor’s strategy is to get the fiscal 2016 and 2017 budgets to zero. That means getting by – and hoping the state is spared any costly natural or economic catastrophes, and that the state Supreme Court doesn’t order increased school funding. If leaders obeyed state law, they’d also leave an ending balance of 7.5 percent of expenditures, or about $485 million.
The Legislature’s budget balancing surely will involve some of the shortsighted and counterproductive gimmicks offered by state budget director Shawn Sullivan in response to economists’ lowered revenue projections Wednesday.
The highway fund will be robbed of another $185 million, a contribution to the pension plan likely deferred as long as possible, and state universities further docked.
But lawmakers can be expected to resist both the shameless sell-off of the tobacco settlement proceeds, which are fundamental to Kansas’ foresighted commitment to early childhood education and health programs, and the proposed reductions to K-12 schools and social services.
The Legislature’s consideration of the Alvarez & Marsal study’s 105 budget recommendations, promising $301 million in first-year savings, has been less than exhaustive so far. It’s a prime time for the legislators who always say the state spends too much to get specific about what to cut.
But any true, sustainable solution starts with more revenue. That’s why the Legislature should follow the lead of the pragmatic conservatives including Rep. Mark Hutton, R-Wichita, and Senate Vice President Jeff King, R-Independence, who advocate altering or eliminating the 2012 tax reform that has allowed 331,000 tax filers to pay no state income tax on their pass-through business income.
Though the $211 million in reclaimed revenue won’t be enough to balance the budget, ending the exemption would fix the glaring unfairness of taxing the income of paycheck earners but not of business owners. The governor’s continued defense of the tax break, which was supposed to set off an explosion of job creation, is especially galling given that Kansas had zero job growth over the past year.
A higher tobacco tax is worth considering – for health as well as budgetary reasons. Yet-another sales tax hike, though, would only further shift the tax burden for state services onto those with the fewest resources.
With the governor refusing to show the needed leadership, the GOP-led Legislature had better be prepared to accept the responsibility when it reconvenes Wednesday for the wrap-up session.
Forget trying to gavel out as soon as possible and get on with campaigning for the August and November elections, when every legislative seat will be on the ballot. Lawmakers have work to do, preferably in a way that ensures Kansas can pay its bills from now on.