Bob Sigman: Until shortfall eases, Kansas should consider all options

Gov. Sam Brownback and the Legislature have a financial problem.

The state faces a budget shortfall estimated to be in the millions of dollars brought about by massive tax cuts in Brownback’s first term.

The reduction in state revenue that followed puts Kansas in a precarious position for the next fiscal year that begins July 1.

This formidable financial crisis threatens the adequate funding of many essential services.

Brownback and legislators spent nearly three months trying to resolve the shortfall before the Legislature adjourned its regular session earlier this month.

The governor, a conservative Republican, proposed measures to help resolve the deficit, among them large boosts in taxes on cigarettes, tobacco and alcohol. Recently, however, he has cooled on those so-called sin tax increases.

There were discussions throughout the regular legislative session about adjusting some of the tax cuts to slow revenue losses. Some legislators talked about reducing expenditures.

Late in the session, a budget agreement was worked out by a team of negotiators from both chambers. But critics contend it is highly questionable whether there is enough money to fund it.

The Kansas Constitution requires that the budget be balanced.

Now the heavy lifting on the budget will have to come after the Legislature reconvenes for a supposedly short veto session on April 29. That is when Brownback and legislators must make hard decisions on raising enough revenue or spending reductions to erase the deficit and bring the budget into balance. That also is when new revenue estimates will be available for guidance on drafting the budget.

The back story here is about a faulty tax-cutting plan.

Brownback predicted that his tax reduction “experiment” would create new jobs and economic prosperity. As the shortfall shows, his plan has not panned out, at least to this point.

The tax cuts turned out to be far too deep for the state to absorb, although Brownback said recently that job creation is on the rise. If that trend continues, his plan could bring new revenue into the state treasury.

To help deal with the shortage of revenue, Brownback has transferred millions of dollars from designated funds, including the transportation fund, into the regular state budget. His action has raised concern about the upkeep of highways.

Now Kansans can only hope that Brownback and his supporters in the Legislature will recognize the tax cuts were too steep. They need to put well-reasoned solutions on the table, including reversing the tax reductions, until the shortfall is resolved.

This story was originally published April 14, 2015 at 7:14 PM with the headline "Bob Sigman: Until shortfall eases, Kansas should consider all options."