Economy

Kansas Governor’s Grand Tax Cut Experiment Is Gutting His State’s Services

CREDIT: AP Photo/Charlie Riedel

Kansas brought in $23 million less in tax revenue in October than the state had predicted, continuing a pattern of serious shortfalls that began when Gov. Sam Brownback’s (R) massive tax cuts went into effect in 2012.

The October revenue drop reported Friday afternoon follows a $21 million shortfall for September. Revenues had come in very close to projections for the prior two months, giving the state a solid start to the fiscal year that began in July. After revenues came in more than $300 million below projections in FY2014, the July and August figures were a welcome turnaround. But a third of the way into the budget year, Brownback’s administration now has about $40 million less to work with than it had predicted for FY2015.

The numbers would be disconcerting for any state, but Kansas is especially ill-positioned to absorb this kind of budget hit. The state was ordered to increase its schools funding by hundreds of millions of dollars because its education spending plan was so thrifty that it violated the Kansas Constitution. The plan the cash-strapped state came up with to address that court order involved taking money from one set of underfunded schools and redistributing it to other, even more underfunded schools.

Roughly six years after the financial crisis, most states have turned the economic corner and begun to see tax collections rise for their treasuries. As a result, spending on education finally began rising instead of falling in the typical state in 2014, according to the Center on Budget and Policy Priorities. Kansas is moving the opposite direction, not only in terms of spending for public services but in economic outcomes for individuals.

The results on the ground are breathtaking. The student population has grown by 19,000 but the number of teachers in the state has fallen by 665 since 2009, according to the Kansas Center for Economic Growth. Local education officials around the state told the group that they anticipate further staffing cuts, class size increases, and per-pupil resource reductions in the coming years. On top of the layoffs, schools have had to slash funding for professional development programs that keep teachers current on how to be most effective at preparing their kids. The average district in Kansas will spend $41,500 less on teacher training in 2015 than it did in 2009, the group reports.

These resource shortfalls owe directly to the sweeping tax cuts Brownback pushed for after he was elected in 2010. The changes benefited wealthy Kansans far more than middle-income taxpayers, and actually raised tax liabilities for the poorest people in the state. One key piece of Brownback’s tax package was the complete elimination of taxes on a certain category of business income, a tax break intended to benefit small businesses but which is easily exploited by savvy taxpayers and large businesses. The governor billed the cuts as a shortcut to economic prosperity, but Kansas is creating jobs at a significantly slower clip than its neighboring states and the nation as a whole.

Brownback faces voters on Tuesday for the first time since winning office in 2010. Prior to becoming governor, he had represented deep-red Kansas at the federal level for more than a dozen years. But his re-election bid is projected to come down to the wire, with polls on the eve of the contest showing Democrat Paul Davis narrowly ahead. The Republican Governor’s Association has even committed a substantial amount of money to defending Brownback’s seat as he fights for the change to continue his tax-slashing experiment.