Nick Jordan believes Kansas Gov. Sam Brownback’s administration just hasn’t gotten its message out, and that’s why the media erroneously keep beating up on Brownback.
Jordan just stepped down as Kansas Secretary of Revenue. A longtime friend of mine from Johnson County, Jordan reflected on what went wrong with getting out the “facts” about the state’s declining tax revenues, as well as the positive aspects of what has been accomplished by Brownback. Many of his points are valid and need to be understood.
The trouble is, even if all of Jordan’s arguments are legitimate, they do not begin to explain the dire financial straits Kansas finds itself in.
Despite what Jordan says, some of the key messages have been delivered. I, for one, have reported on numerous occasions that declining tax revenues are, in part, a result of much of the economy tanking in Kansas, which has nothing to do with Brownback’s tax policies.
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Agricultural commodity prices have plummeted. According to the Kansas Farm Management Association, the average net farm income in the state was about $128,000 in 2014. In 2015, that number plunged to about $4,500. The oil and gas business is on its knees, with oil prices half of what they had recently been. The aircraft industry in Wichita has crashed. In addition, Sprint’s unexpected 800-person layoffs in Overland Park also had an adverse impact on the Kansas economy.
That is not all of what Jordan cites as unanticipated external events. He said the Brownback administration expected a recovery from the recession at 3 to 5 percent economic growth. Instead, in Kansas, it was only 0.3 percent.
Jordan admits tax policy was also a factor in the shortfall in revenues, but he hastens to add that it was the 2012 Legislature, not Brownback, who rejected the governor’s proposal for broadening the tax base as a partial offset to tax cuts. Reducing deductions and tax credits was pushed hard by Brownback, to no avail. Yet, the governor did sign the tax-cut bill.
Under Brownback, according to Jordan, taxes on Kansans have been reduced 30 percent. Nearly three-quarters of the tax savings have gone to individuals and families. About one-fourth have gone to small businesses.
The tax exemptions on small businesses — a controversial policy being challenged by many legislators — has been successful, according to Jordan. Brownback continues to advocate keeping those exemptions intact.
“First-time tax returns indicate 20,000 small businesses are new to Kansas,” Jordan said. “Most of those are from Johnson and Wyandotte counties.”
Furthermore, gross wages are growing in the small business arena in Kansas, Jordan added. Where Kansas has been hurt, according to Jordan, is in the jobs decline in many large corporations.
There is some good news about the Kansas economy being ignored, Jordan said. There are signs the economy in Kansas is picking up. In the April-June quarter of 2016, Kansas tied for fifth in the nation in the increase of gross domestic product, he said.
Wichita State University’s Center for Economic Development and Business Research just revised its economic forecast for 2017 to 13,000 new nonfarm jobs, most of which are in professional services.
Add together the potpourri of facts Jordan presents, and it just doesn’t seem to add up to what Kansans know is an extraordinary ongoing budget crisis, which keeps getting temporarily fixed by one-time budget gimmicks.
Brownback’s message, as espoused by Jordan, falls short of the bigger message the media highlight — namely, that radical tax cuts are the main culprit in chronic revenue shortfalls.