Economy

Kansas Uses Sex Toy Auction To Help Close Budget Gap

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They may be squeezing school budgets and undermining public services, but Kansas Gov. Sam Brownback’s (R) trickle-down tax cuts are at least bringing joy to one unlikely group: people looking to spice up their sex lives.

After seizing inventory from a chain of adult novelty shops that had not paid state taxes, the state set up an auction to allow the owner to pay back his debts. The proceeds from auctioning off hundreds of pornographic videos alongside vibrating underwear, bondage tape, handcuffs, paddles, and thousands of other adult items will go to the Kansas Department of Revenue and any other creditors from the stores the state shut down in July. The department returned the items to the owner on the condition that he auction off the seized property in order to pay his debts.

The man who owned the five Bang stores had failed to pay the state nearly $164,000 in taxes, according to the Topeka Capital-Journal.

Kansas’ projected budget shortfall between now and 2016 is well over $200 million.

Brownback created that budget hole by slashing the state’s tax rates repeatedly since winning the job in 2010. Under his leadership, he pledged that Kansas would be a “real, live experiment” with conservative small-government economic policies, and promised the experiment would produce job growth. His tax cuts were targeted primarily to the wealthy and to businesses. Brownback’s push went further than national-level Republican anti-tax politicians are able to go: he eliminated all taxes on income reported through a small business entity rather than through regular wages.

In addition to criticizing the top-heavy nature of Brownback’s tax cuts, opponents warned at the time that the governor’s policies would put large holes in Kansas’ already-stretched budget. Now that the tax cuts have had time to kick in, that warning is proving prescient.

For just one three-month period this spring, the state collected $334 million less than it had anticipated. The state’s budget officials expect a further $245 million shortfall from the 2017, 2018, and 2019 fiscal years.

Even prior to Brownback’s tax cuts, the state was underfunding its school system so severely that the Kansas Supreme Court found its education budget unconstitutional. The cuts have made that difficult problem impossible to solve, and the best response that Kansas legislators have been able to find to the court’s demands is a budget scheme that “[takes] from Peter to pay Paul,” in the words of one of the lawyers who brought the school funding case.

If his policies had produced the boom times he promised, maybe these budget restraints wouldn’t be inflicting such pain. But instead of unleashing growth in Kansas, the state’s economy is floundering. Poverty is rising in the state. After 20 years of keeping pace with the national economy, Kansas has now fallen behind the national average for economic growth. Kansas officials say that personal income growth will lag the national income growth rate this year and again in 2015. The state even lost its AA+ credit rating on government debts from Standard & Poors in August after the agency decided the fiscal situation required a downgrade.

With Brownback’s government auctioning sex toys to try to keep its budget holes from gaping any wider, it might be tempting to charge the conservative Christian governor with hypocrisy. Brownback’s political career is built as much on social conservatism as fiscal conservatism, and his fellow Republicans in the state House of Representatives have voted twice in recent years to impose restrictions on exactly the kinds of adult businesses that fell prey to tax seizures earlier this summer.

But since it is illegal to destroy seized property, auction arrangements like this are standard operating procedure for tax cases that can’t be resolved more simply, Department of Revenue spokeswoman Jeannine Koranda said in an interview.

“This is a business that is able to operate legally in Kansas that was not paying its taxes, and when we have gone through a whole series of [collection] attempts that have failed” such as tax liens and banking levies, Koranda explained, shutting a company down is the last resort. “We’re handling this just like we have other seizures.”

UPDATE

This story has been updated to clarify that Kansas is not directly auctioning the items, but released them on the condition that they be auctioned and that the proceeds go to paying back taxes.

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