As we learned in the 1980s, if you cut taxes, but not spending, you have a big problem.
The Kansas City Star sowed the seeds for the failed harvest of the “Brownback experiment” the very day that Gov. Sam Brownback signed the epic tax-cut bill into law in May 2012.
The first full sentence of the newspaper’s report read, “Kansas Gov. Sam Brownback took a grand gamble Tuesday with a monumental tax plan that he hopes will spur an economic revival and not an unparalleled budget crisis that leaves state services in ruins.”
There is some curious syntax here. Is it possible that the governor “hoped” his tax plan would “spur … an unparalleled budget crisis that leaves state services in ruins”? Of course not. The editors simply wanted to jam the idea of a “unparalleled budget crisis” into the first sentence, logic be damned.
A paragraph later, before quoting the governor, the article quoted some anonymous lawmaker who assured readers that this was the “worst tax bill” ever to come out of the Legislature.
The bill cut income tax rates and exempted non-wage business income for LLCs, S corporations and sole proprietorships. The latter provision, The Star conceded, was “aimed at job creation.”
And Lord knows, job creation was needed. In the dozen years leading up to the bill’s passage, the only employment sector in Kansas that experienced net job growth was local government. Fewer Kansans were employed by the private sector in 2012 than in 2001. Surrounding states with lower tax rates were all performing better.
Unfortunately, the lack of new jobs did not discourage the state from spending more money. In fiscal year 1998, state general fund budget was $3.8 billion. By 2008, just a decade later, it had grown to $6.1 billion, up 60 percent. Had Kansas increased spending during those years at the rate of inflation, spending in 2008 would have been $5.0 billion, a saving of more than $1 billion a year going forward.
Had the state’s public officials managed to keep spending in check, Kansas would not have suffered the nearly $1 billion budget shortfall that it did in the years 2009 and 2010 combined. This was the mess that Brownback inherited when he took office in 2011.
The bill that Brownback signed in May 2012 was not the one he proposed four months earlier. After some unusual sausage-slicing and spicing in the Legislature, the package that landed on the governor’s desk was in some ways more radical than intended. From the day the bill was signed, everyone knew that spending would have to be adjusted to make the tax cut work.
Adjusted spending was in the best interests of the Kansas taxpayer, but in the interest of almost no one who claimed to look out for that taxpayer. For reasons not hard to figure, The Star launched a five-year jihad against the governor that was “unparalleled” in its relentlessness. Indeed, Ahab was more casual about harpooning
his whale than the newspaper was about sinking Brownback.
Many of the state’s elected officials—just about all the elected Democrats and some Republicans—were just as keen on sabotaging Brownback’s tax cut. In 2013, the state raised taxes and actually increased spending.
That proved to be only a temporary fix, as legislators had yet to resolve the state’s structural deficit. Once reserves were depleted, they raised taxes again in 2015, this time on alcohol and tobacco, easy targets. Yet, incredibly, they made no serious effort to cut spending.
Shocked by their failure to drive Brownback out of office in 2014, The Star’s editors contented themselves with regularly making his newspaper-reading a fresh hell. In time, liberal media across the country joined in presenting Kansas as the poster child for trickle-down syndrome, in the process discouraging businesses from moving to Kansas.
Despite the discouragement, new business filings set a record in 2016, and the total number of business enterprises set a record as well. In the years before Sam Brownback took office in 2011, new business creation in Kansas had essentially flat-lined. After the tax-cut bill passed, the numbers grew dramatically, with new filings increasing every year since 2012. In certain quarters, this news was not welcome. In most quarters,
it was not even heard.
The newspaper had its special interests to protect, none more special than the public-education lobby. Scarcely a day passed without some tale of woe. Only the wonkiest of policy wonks in Kansas knew that spending per pupil in Kansas had grown faster in the four years that followed Brownback’s tax cuts than in the four years that preceded them.
In 2008, state spending per pupil stood at $7,008. By 2012, it had fallen to $6,983. By 2016, it had grown to $8,540. If spending per pupil had grown at the rate of inflation in the past four years, it would be about $1,250 per year less than it is today. Multiply that by 500,000 students.
Supreme Court meddling has played a role in that growth, but The Star has routinely applauded its meddling. After all, 80 Blue Valley school employees—and 79 from the Shawnee Mission district—out-earn the governor, and he makes $99k. Hate to have those administrators suffer for the kids’ sake.
If Brownback were to give out a chutzpah award for these past few years, top honors would have to go to the Save Kansas Coalition, a group headed by former governors John Carlin, Mike Hayden, Bill Graves, and Kathleen Sebelius—two tax-and-spend Republicans and two Democrats.
In the run-up to the 2016 election, the governors came in from their pastures and sent a letter far and wide. With straight faces, they told Kan-
sas taxpayers that they were working “to regain our fiscal health and stop the calculated destruction of our revenue stream and our educational, healthcare and transportation systems.”
Regain fiscal health? Exactly what period were these delusional souls referring to? Stop the calculated destruction? Did they mean that Brownback intended to destroy all these good things? Heck, he couldn’t even destroy the revenue stream.
Said Dave Trabert of the Kansas Policy Institute, “Kansans have been misled into thinking that spending has been reduced. The truth is that General Fund spending is budgeted to set a new record this year.” Indeed, in 2015, in 2106, and in 2017, the state spent or planned to spend more than in 2012.
So tell me: Who is really responsible for the budget crisis in Kansas?