H. Edward Flentje: Kansas lurching from one financial crisis to next

After smooth sailing financially for most of the 20th century, risky, ill-considered actions on state taxes now send Kansas’ ship of state lurching from one financial crisis to the next.

This radical experiment has produced five years of deficit spending, budget cuts and repeated threats of budgetary disaster, excessive and unnecessary borrowing and credit downgrades, two rounds of huge tax increases, and general incompetence in state finance.

In this new normal, Kansans can expect a continued deterioration of core state services – education, health care, highways and aid to vulnerable citizens. Our children and grandchildren will be paying off debts incurred to protect their parents’ tax cuts, and borrowing costs will increase. Business owners and nonprofit organizations will continue to experience an uncertain and threatening tax environment.

Last month’s court order on school finance and last week’s news of sinking revenues foretell that state finance will again be on the rocks sooner than expected.

Republican state lawmakers who took charge in 2010 and solidified their majorities in 2012 and 2014 are responsible for this financial debacle. The voters who placed them in office bear responsibility, too, but they have been misled along the way.

None of these lawmakers campaigned for the heresy of eliminating the state income tax in 2010, certainly not candidate Sam Brownback. He cloaked his “road map” around quickly forgotten themes of addressing childhood poverty, fourth-grade reading levels and education.

These Republicans drank the tax-cut Kool-Aid as an economic panacea offered by discredited corporate guru Arthur Laffer. A tortuous legislative process in 2012 forced through an ill-conceived bill that cut and eliminated state income taxes by nearly $1 billion annually and would have imposed spending cuts of $7 billion based on the governor’s plans.

These same Republicans then did an about-face on taxes and began advocating increased sales taxes to clean up their self-inflicted mess. The first round of tax increases came in 2013 after an extended session. Republicans increased sales taxes and shrank income tax cuts, totaling $420 million annually, to fill the budget hole.

However, economic reality again undermined the tax-cut dogma throughout election year 2014: State revenues plummeted; economic growth lagged; credit was downgraded; and another budget crisis loomed. Brownback buried his head in the sand with a clever campaign ditty: “The sun is shining in Kansas, and don’t let anybody tell you any different.” The ruse worked, as he eked out a narrow victory.

The gap between revenues and expenditures, however, had ballooned to $800 million in 2015. During the longest legislative session in state history, House members were locked in their chamber late into the night, threatened and browbeaten. Finally, at 4 a.m., sleep-deprived Republicans enacted a second round of higher taxes, primarily sales taxes and further shrinking of income tax cuts, totaling on average $450 million annually over the next three years. Brownback held no signing ceremony.

Unstable and unsustainable state finance has handed Kansans deteriorating state services, foisted debt onto future generations, and warned prospective businesses to be wary of the state’s volatile tax climate. Is this financial future what Kansans bargained for when they voted these Republicans lawmakers into office?

This story was originally published July 4, 2015 at 9:03 AM with the headline "H. Edward Flentje: Kansas lurching from one financial crisis to next."