The income tax cuts signed into effect by Gov. Sam Brownback in 2012 have sent Kansas’s finances into a free fall, and only restoring a fair taxing system can put the state back on the right course: That was the message three speakers delivered to an audience of more than 200 at a forum on Kansas’s “failed tax plan” put on by the MainStream Coalition at the Matt Ross Community Center in old Overland Park on Thursday.
Kansas Center for Economic Growth Executive Director Annie McKay and Senior Fellow Duane Goossen painted a stark picture of Kansas’s financial prospects in the wake of the controversial tax plan promoted by the conservative wing of the state’s Republican party. Prior to the tax cuts, Kansas budget estimators had generally been able to predict state revenues to within .2 of a percent of actual receipts, McKay said. Even during the uncertainty of the Great Recession, the forecasts were off 2.1 percent at most. After the tax cuts went into effect, however, budget forecasts have badly missed the mark, coming in 5.6 percent below budget in fiscal year 2014, for example.
To compound matters, the legislature’s current budget has $6,298,000,000 in expenditures against just $5,972,000,000 in recurring revenue. To balance the budget, the legislature approved nearly $300,000,000 in one-time transfers from highway funds and other sources. But the savings that the state has dipped into to make ends meet the past two budget cycles are nearly gone and even with the increased sales tax, there isn’t enough in recurring revenue to meet the state’s financial obligations.
“Revenue has been coming in below expectations — and it’s going to continue to do that,” Goossen said. “If revenue doesn’t come in as expected, then something has to get cut.”
McKay and Goossen were joined by Wyandotte County Rep. Kathy Wolfe-Moore, who said she had been surprised and disheartened by the administration’s refusal to acknowledge the tax plan’s negative impact. Such inflexibility and unwillingness to respond to the actual conditions on the ground would lead the ouster of the CEO of a private company, she said.
“I’ve never been in a situation where reality is so consistently and blatantly ignored,” Wolfe-Moore said. “It appears that the captain of our ship, the governor, is willing to go down with the ship.”
McKay noted that Kansas lagged behind its neighbors in new job growth since the end of the recession and that the no-income-tax states, like Texas, that Kansas conservatives frequently point to as a model have revenue sources like extensive oil operations or a tourism industry that Kansas will never be able rely on.
Moreover, Wolfe-Moore noted, the negative attention the tax cuts have drawn appear to be having a serious impact on the state’s reputation.
“Instead of people coming to Kansas, they are leaving Kansas. And I think a lot of that has to do with a lack of confidence in Kansas,” Wolfe-Moore said. “We’re in virtually every national publication, and it’s not in a positive manner.”
You can watch the forum in its entirety below: