Editorials

Repealing Gov. Sam Brownback’s unfair business tax cuts is now a top priority in Kansas

Gov. Sam Brownback trimmed $17 million from higher education funding for the University of Kansas in Lawrence and other schools when state revenues came in lower than expected last month.
Gov. Sam Brownback trimmed $17 million from higher education funding for the University of Kansas in Lawrence and other schools when state revenues came in lower than expected last month.

Kansas is the Titanic, crashing into an iceberg that could sink it into near-bankruptcy.

Alas, Capt. Sam Brownback is still rearranging the deck chairs, assuring everyone that the problems will go away.

Soon. Promise.

But the state’s constant financial troubles won’t disappear on their own. The governor and the Republican-dominated Legislature must act swiftly to raise sufficient funds that can provide valuable public services to 3 million Kansans.

When the state releases its monthly revenue report Friday, it will show that Kansas finished March with millions more — or millions less — than expected.

If the news is bad, Brownback could be forced to quickly announce even more budget cuts. He trimmed $17 million from higher education on the same day the last disastrous monthly shortfall was announced March 1.

Yet even if the news is positive this time, the celebration will be muted. That’s because Kansas’ income tax revenues will still be running at a rate of roughly $600 million less this fiscal year than they were before Brownback’s 2012 tax cuts took effect.

Some ultra-conservative legislators claim the state has a spending problem, not a revenue one. Yet they have been abysmal failures in putting together a coherent plan to carve large expenses out of the budget. It would be irresponsible to cut hundreds of millions of dollars from public schools, public safety, social services, higher education and other services. Kansas government spending is not out of control compared with other states.

Here’s the far more reasonable first order of business for the Legislature when it returns in late April from its current break.

It should repeal Brownback’s reckless and costly income tax cuts for the 330,000 businesses that unfairly don’t pay taxes on their incomes. That move would raise more than $250 million annually.

It is encouraging that even some top Republican lawmakers who have followed Brownback’s destructive economic policies for the last few years want to kill the giveaway. So do many businesses that get the tax break.

Notably, it has not led to Brownback’s promised surge of employment by Kansas’ businesses. In fact, the state reported in February that it had 5,400 fewer jobs than in February 2015, the fifth worst year-over-year record in the nation.

In mid-March, harsh criticism of the tax loophole came from an unusual source: the Tax Foundation, a nonpartisan, national group that generally supports lower taxes because of the claim they lead to greater economic growth.

Testifying to a legislative panel in Topeka, Scott Drenkard of the foundation lashed out at how Brownback and the Legislature had bungled the income tax cuts of 2012.

The tax exemption granted to certain businesses “is primarily incentivizing tax avoidance, not job creation,” Drenkard said. He added that the state’s actions narrowed the tax base “in a haphazard and unpredictable way.” Then the Legislature was “forced” to approve large sales and cigarette tax increases in 2015.

Eliminating the business tax break must be the highest order of business in the remaining days of the 2016 legislative session.

True, Brownback could veto such a bill if it got to his desk. Still, the Legislature must try to do the right thing on behalf of the state’s future.

However, instead of facing reality, here’s the less significant action Brownback’s administration was touting earlier this week.

It wants to improve the system that forecasts how much money the state will collect. Monthly revenue reports tell politicians and the public how well the state did in meeting previous estimates. The recent record is abysmal; the state has collected less money than forecast in 12 of the last 14 months.

We agree: Kansas requires a more realistic way to predict how much money will be coming in and, thus, how much the Legislature is able to spend.

But Kansans need far more than that. They deserve a state government that adequately finances crucial services — especially public and higher education and social services for the needy. For starters, lawmakers need to repeal the business tax cut.

Although the state has already hit the destructive iceberg of tax cuts, it’s not too late for a heroic rescue to prevent Kansas and its residents from drowning in an ocean of red ink.

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