Dave Trabert: State has spending, not revenue, problem

It might be hard to imagine, but the Kansas budget really can be balanced without any service reductions or tax increases. Even with reduced revenue estimates, scheduled tax reductions can continue, and there can be new non-pension education funding and more money for Medicaid. Along with the specific recommendations in the Kansas Policy Institute budget plan, which include fund transfers, state government would need to operate just 7 percent more efficiently over the next three years.

Not 7 percent each year; a total of 7 percent over three years.

The math works; that’s the easy part. The hard part is getting a majority of legislators to force a cultural shift in government. They need to stand up to the special interests that profit from excess government spending and get the bureaucracy to embrace a better-service, better-price culture, where services are provided at a better price and taxpayers reap the savings in the form of lower taxes.

Every state has the same basket of services (education, highways, social service programs, etc.), but the states that tax income spent 49 percent more per resident in 2012. Kansas spent 37 percent more. Here’s another fact. If 2004 general fund spending of $4.32 billion had increased for inflation and population, this year’s budget would be $5.43 billion, not $6.43 billion as currently estimated by the Kansas Legislative Research Department. That billion-dollar difference is indicative of tremendous efficiency opportunities.

There will be less revenue than estimated last April, but the new revenue estimates are understated by $183 million. KLRD included transfers out of the general fund for local ad valorem tax relief ($108 million) and city-county revenue sharing ($35 million), despite the fact that neither has been funded since 2003. It also increased the transfer out for the Kansas Bioscience Authority by $40 million, which will not occur based on past practice.

Tax revenue growth has actually outpaced inflation over the past 10 years. Even after reducing income taxes, fiscal year 2014 tax revenue was 28 percent higher than in 2004, while inflation over the period was only 24 percent. Official revenue estimates predict that the gap will only get wider in future years.

Kansas has a structural budget issue, largely because of bipartisan resistance to reducing the cost of government when taxes were reduced. Kansas doesn’t have a revenue problem; as it has for a long time, Kansas has a serious spending problem.

The state budget can be balanced without service reductions or tax increases. It’s a matter of whether legislators and the administration adopt the better-service, better-price culture or succumb to political pressure and spend inefficiently.

This story was originally published November 29, 2014 at 6:01 PM with the headline "Dave Trabert: State has spending, not revenue, problem."