Kansas’ failed experiment in supply-side economics came to an end late Tuesday night.
Members of the Kansas House joined colleagues in the Senate to enact a broad tax increase package worth $1.2 billion over two years. The additional money is meant to cover a budget deficit and improve funding for the state’s schools.
It was a stunning and historic repudiation of Gov. Sam Brownback, as lawmakers of all political stripes voted to override his veto.
The tax measure eliminates the fatally flawed small business exemption and adds back a third tax bracket, essentially repealing most of the governor’s 2012 tax plan.
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Members of the Legislature should be commended for their hard work and courage in reaching this decision. Many toiled long hours in Topeka discussing alternative approaches to address the state’s budget mess.
Conservative members who showed flexibility and common sense in voting to override the governor deserve credit, as do lawmakers who met regularly with constituents and heard a clear message: Fix the budget problem permanently.
Voters who made their wishes known also helped move the state in the right direction.
Yet passage of the tax package isn’t exactly a cause for celebration. Kansans will send more of their money to Topeka over the next years, and the government has an obligation to make sure those funds are spent efficiently and wisely.
The tax increase was a critical step in rebalancing the state’s budget and clarifying priorities, but it was only one step. There is more work to do starting next year.
Kansas’ extraordinarily high and regressive sales taxes remain a concern. In our area, those high sales taxes chase thousands of shoppers across the state line into Missouri, where grocery store food is cheaper.
In 2018, the Legislature should closely examine the state sales tax on grocery store food, with the goal of phasing it out.
In return, lawmakers should continue to work on reducing or eliminating special-interest exemptions in the sales tax code.
Lawmakers must also repair the damage caused by years of budget shortfalls and spending cuts. That means a new focus on restoring highway construction funds, which were diverted to cover deficits.
Borrowing from the state’s long-term investment fund must be repaid. Pension fund borrowing must stop (and pension reform should move to the top of the state’s agenda).
A solid budget may mean credit upgrades in Kansas, which will make state borrowing cheaper.
If expanded Medicaid remains an option, the Legislature should consider it. Tens of thousands of Kansans would benefit from access to health coverage, and rural hospitals now struggling to pay the bills would be helped.
Cuts to higher education should be restored. Making it harder for Kansans to afford college is short-sighted and counterproductive.
The constitutional requirement to pay for K-12 education remains a challenge. Lawmakers must be vigilant in ensuring that a new school spending plan provides adequate resources for poorer districts, allowing all the state’s children access to a quality education.
We harbor no illusions about how long all of this will take. It may be a generation or more before Kansas fully recovers from the Brownback tax experiment. Kansans will need to be patient — passing two major tax increases in two years will put the state in the black, but that won’t solve every problem in the state’s economy.
Finally, a word about Brownback.
We have been sharply critical of the governor since 2012, when the tax cuts passed. We worried the package would not be the “shot of adrenaline” that Brownback and his supply-side advisers predicted.
Our concerns and those of other economists, lawmakers and outside observers were never enough to convince the governor to change course. Today, we acknowledge the governor’s firm belief in the correctness of his policy approach. He never wavered.
Yet that inflexibility almost inevitably led to Tuesday’s historic defeat. In the face of irrefutable evidence of continuing budget problems in Kansas, the governor chose not to lead. Instead, he simply ignored reality.
Kansans were always ready to give Brownback the benefit of the doubt. But that patience was not inexhaustible. Eventually, voters grew weary enough to toss the governor’s allies out of the Legislature and replace them with commonsense candidates.
That’s a lesson for the governor, whose time here may soon come to an end. But it’s also a lesson for those who want to replace him in 2018.
Kansans do not need or want an ideologue in the governor’s mansion. They need a practical, problem-solving governor.
Perhaps President Donald Trump and his colleagues in Washington will hear that message as well and abandon plans to replicate Kansas’ disastrous approach to tax cuts.
The vote Tuesday serves as an important reminder of a fundamental truth: The people still rule. Not the so-called experts, the partisans, the special interests or even the pundits. The people of Kansas stood up and said “enough.”
Their representatives heard those voices and voted accordingly.
The page has turned, and the work begins anew.