States are just like families. They have to live within their means.
That’s what we’ve been told over and over by politicians, particularly tax-cutting conservatives.
So, let’s see what kind of “family” Kansas is.
Everyone knows by now that Kansas slashed its tax rates. As a result, the state came up $279 million short for the current fiscal year.
Exactly how did Kansas deal with its impending deficit?
Kansas did not cut to make ends meet.
If Kansas were a family, it would be as if, to deal with the shortfall, the family invaded its college fund, its retirement fund and its savings account, then mortgaged the house to the hilt. Then the family decided to endure a slight sacrifice by cutting a small part of its expenses by 4 percent.
After decimating all its savings and borrowing on its house, the family would then declare itself successful in dealing with its deficit.
That’s precisely what Kansas did.
The governor invaded the highway fund to the tune of $100 million; he diverted $46 million from the state’s retirement fund; he swept up $55 million from fee revenues in the Kansas Department of Health and Environment; he took $14.5 million from the Kansas Endowment for Youth; and then, finally, the governor did cut some agencies’ budgets by 4 percent.
Sam Brownback fudged, when he plugged the deficit almost entirely by one-time moves. Because the governor decided this year not to try to live within the state’s means, that will make next year’s deficit that much worse.
The Legislative Research Department, which had forecast a $436 million deficit for next fiscal year, now has upped that to $648 million in the red. That’s because Brownback did not really deal with the financial crisis at hand.
Kansans will feel little immediate pain from the actions just taken. The pain will occur gradually, over time.
But what about next year? What does Sam Brownback do for an encore?
All the one-time funds have already been tapped — except, and this is a big except — the reserve funds of school districts. You can bet that those funds will be invaded next year. It’s the only remaining large pot of gold available.
But then the real nitty-gritty of plugging next year’s massive deficit lies before Kansans.
What will the governor do next time?
The governor has already said, “Everything is on the table,” so we take him at his word. The only thing not on the table, he has made clear, is raising taxes.
Here are some measures which are likely to be on the radar:
▪ Invade school reserves.
▪ Cut “non-classroom” school expenses. There just is no way for schools to be saved next time from cuts. They make up half the state’s budget.
▪ Plug sales-tax exemptions. This would hit the poor disproportionately, but it is one way to increase revenues without technically increasing taxes.
▪ Rob the cities of their share of gasoline taxes and liquor taxes. For example, Overland Park’s share of gasoline taxes is $4.7 million, which all goes to maintaining roads. The liquor tax brings in $3.4 million, which goes to parks and recreation. The city would be faced with increasing its property taxes to compensate for the loss.
▪ A further deferral of contributions to the state’s pension plan, KPERS.
And then come severe across-the-board cuts. They will touch every Kansan.
Duane Goossen, former longtime Kansas budget director, has estimated that to deal with a deficit in the neighborhood of $648 million there would need to be an across-the-board cut of up to 10 percent, including schools, higher education and Medicaid.
This “family,” sooner or later, really will have to live within its means. And in this self-inflicted crisis, the excruciating pain will be felt, and Kansans will not like it one bit.
To reach Steve Rose, longtime Johnson County columnist, send email to email@example.com.