Stephen Koranda
May 13, 2015

Kansas has used up its savings account and is facing a budget deficit of $400 million. This happened after politicians there sharply cut taxes and heralded the move as one that would spur economic growth. Kansas Public Radio’s Stephen Koranda reports that now, tax hikes are back on the table.

STEPHEN KORANDA, BYLINE: Governor Sam Brownback was elected in 2010 in a landslide. He called the last 10 years a lost decade when it came to the economy, and he pushed hard for tax cuts.

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GOVERNOR SAM BROWNBACK: This is about jobs. This is about private sector creating of jobs. It’s about the fundamental, private sector job-creating machine, which is small business.

KORANDA: That was when he signed the cuts into law in 2012. Brownback said the state could preserve core government services while cutting taxes.

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BROWNBACK: We will meet the needs of our schools and our most vulnerable and our roads will get built.

KORANDA: Fast forward to now, last month, Brownback touted job growth numbers in Kansas and business filings.

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BROWNBACK: We’ve seen huge growth in the Kansas City area taking place in the private sector, again job growth. We’ve got one of the best unemployment rates in the nation – 4.2.

KORANDA: But some take a different view and say the economic picture is not so rosy, especially when compared to neighboring states.

ANNIE MCKAY: When you put this in terms of the job growth rate, which isn’t magic math, it shows that we trail region.

KORANDA: That’s Annie McKay with the Kansas Center for Economic Growth, which bills itself as a nonpartisan think tank supporting balanced economic policy. She says even with job growth, big cuts in tax rates leave Kansas in a position many states are not in – facing a budget shortfall as the economy recovers.

MCKAY: At this point, we’re seeing such record revenue loss that we’re having to look to tax increases to pay for the tax cuts and that’s just to get us to zero.

KORANDA: So does that mean Kansas should do an about-face on tax policy? Republican State Representative Kasha Kelley says no because small business filings are up. She says the economy is like fallow ground – you can’t make it productive overnight.

REPRESENTATIVE KASHA KELLEY: When you have a ground that’s packed after years and years of doing the same thing, you have to take some time to till it. You have to take some time to nourish it. And that’s what this tax package is doing, but it takes time.

KORANDA: Republican State Representative Mark Rhode says the problem is that Kansas has not kept a cap on spending. He wants to look for government budget cuts first before talking taxes.

REPRESENTATIVE MARK RHOADES: We know, anecdotally, I could give you an hour’s worth of examples. Once you dig down and you realize, OK, oh, that program doesn’t work anymore, but we still – you know, automatically gets funded, we don’t even address it.

KORANDA: But so far, Kansas lawmakers seem to be leaning towards more taxes. The question is will they undo the governor’s path of income tax cuts or try to continue the march downward on income tax rates and instead raise other taxes? Even some Republicans are now joining Democrats like Representative Kathy Wolfe Moore on the issue of taxes.

REPRESENTATIVE KATHY WOLFE MOORE: I think anyone who says that there are other forces at work to cause this tremendous shortfall are just fooling themselves.

KORANDA: Whatever lawmakers do, they have to do it quickly. Saturday is supposed to be the last day of the session. For NPR News, I’m Stephen Koranda in Topeka, Kan.

Hear more from KCUR here.

KendraKCUR: Kansas lawmakers consider raising taxes to lower deficit