The budget presented by Kansas Gov. Sam Brownback on Friday is yet another attempt to patch over the state’s fiscal problems without addressing the dire revenue shortfall responsible for the crisis.
The GOP governor has proposed some tax changes, including a welcome slowdown of planned income tax cuts. But his two-year spending plan continues to shirk the state’s responsibility to adequately fund schools and vital services, pay its pension obligations, take care of vulnerable citizens and maintain its roads and bridges.
It proposes a radical change in school funding that likely would wallop districts that serve high numbers of needy students and create even more of a clash with the courts.
Although he said in his State of the State speech on Thursday that he intended to “continue our march to zero income taxes,” Brownback actually proposed changing recent tax laws to cut income taxes more gradually. At the same time, he wants to move faster than previously legislated to get rid of income tax deductions, such as the one on mortgage interest.
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Both proposals are steps in the right direction, but they aren’t enough. If accepted by the Legislature, the changes would only raise $181.7 million through the end of the 2017 budget year. Kansas must somehow find more than $700 million just to break even at the end of the 2016 budget year.
Under Brownback’s plan, some of that money would come from dramatically higher taxes on cigarettes and other tobacco products and on sales of alcoholic beverages.
The tax on a pack of cigarettes would jump from 79 cents to $2.29, and the tax on liquor products would grow from 8 percent to 12 percent. Combined, those increases are estimated to raise in the neighborhood of $100 million a year.
While the tax hikes on alcohol and tobacco are commendable from a public health standpoint, they are a risky way to balance the budget. Consumers change their habits to avoid expensive products. A predicable change in Kansas, especially in the Kansas City area, would be trips across the state line to purchase cheaper products in Missouri and other adjacent states.
The governor’s proposed budget leaves intact the total income tax exemption for owners of about 200,000 businesses who declare their profits on their personal tax forms. That policy, while benefiting some of the state’s wealthiest citizens, is draining revenues without showing evidence of strong job growth.
Most of the rest of Brownback’s budget-balancing measures are achieved through cuts and what the administration calls “efficiencies.” They are actually constraints that will harm the state’s ability to do essential work. A 4 percent budget cut imposed on most state agencies a few weeks ago would continue.
While the governor boasted of his concern for schools during his campaign, he took a different tack in his speech this week and preposterously blamed most of the state’s budget shortfall on an increase in education spending.
Pronouncing the state’s school finance formula to be deliberately complex, Brownback has proposed blowing it up. He wants to terminate it at the end of June and work on a new, simpler and cheaper funding plan. In the meantime, schools would receive a set amount of money based on their attendance.
This is more of the governor’s magical thinking. The education funding formula is complex because all school districts, and all children, are not created equal.
The current formula tries to account for transportation difficulties and the added expense of educating students with special needs. The Legislature will create even more problems by attempting to sacrifice fairness for simplicity.
On paper, Brownback has proposed balanced budgets for the next two years, ending with a reserve fund of $252 million. But his proposals leave the state barely able to meet its statutory obligations, much less invest in its citizens and the future.
Kansas will continue to stagger from the Brownback tax cuts.
The governor, meanwhile, continues to tell Kansans that his low-tax strategy will result in a booming economy one of these days.
“Great achievements require hard work,” he said in his speech Thursday. “It requires the courage to face our challenges head-on and find solutions that work for Kansas.”
Unfortunately, the latest budget plan doesn’t do that. Not at all.