December 15, 2015
TOPEKA – Optimism was in short supply among panelists discussing the Kansas state budget and prospects for improvement in human services next year.
Three panelists for the public policy forum hosted by United Community Services painted a mostly gloomy picture for low-income Kansans as a result of cutbacks state lawmakers have made to fill budget gaps resulting from dramatic cuts in income taxes. Despite a big increase in the state sales tax, borrowing from the state highway department and an effort to cut costs, the state’s policies will likely continue to disproportionately affect the poor, the panelists said.
The situation has become so bad that residents of other states cite Kansas as a cautionary tale in what not to do with a budget, said Annie McKay, executive director of the Kansas Center for Economic Growth. “No one wants to touch it with a ten-foot pole based on what’s happened here,” she said of the state’s tax decisions. In fact, Kansas’ predicament has inspired a Twitter hash tag #DontBeLikeKansas, she said.
McKay said the state’s shortfall has not resulted in a windfall of new jobs, as some lawmakers and Gov. Sam Brownback had hoped.
“We’re looking at a future where we continue to have revenue shortfalls and budget gaps. We can’t invest in opportunities let alone respond to crises,” said McKay. “That’s going to be what we continue to face until we do something about the structural underlying problem of the income tax changes.”
State lawmakers in 2012 eliminated income tax on profits for sole proprietorships and limited liability corporations. Proponents said it would bring new jobs and eventual revenue growth into the state. Since then, state revenue has fallen and the state’s bond rating was downgraded. Lawmakers spent much of the last session debating how to shore up significant revenue shortfalls.
Brownback told The Associated Press last week that his tax cuts have worked in creating jobs, noting that the state’s unemployment rate in October, 4.1 percent, was the lowest it has been in more than 14 years.
United Community Services is a nonprofit group that analyzes data on health and human services, primarily in Johnson County. The other panelists were Ashley Jones-Wisner, state policy manager for KC Healthy Kids, and Audrey Dunkel, director of financial advocacy for the Kansas Hospital Association.
Panelists were particularly critical of the sales tax increase that went into effect in July, saying the sales tax on food hits the poor the hardest. Jones-Wisner said a family of four in Kansas making the median income of $44,000 a year pays four times more of its income on food than people in the highest income levels.
The sales tax on food of 6.15 percent is far higher than in neighboring states, she noted. Oklahoma is the next highest in bordering states, with a sales tax of 4.5 percent, while Colorado and Nebraska do not charge sales tax on food, she said.
Jones-Wisner said her group, which advocates for policies that encourage healthy eating and living, is concerned about how Kansas ranks in healthy living. The state was once rated the eighth healthiest in the country, but has fallen to 27th in the past quarter century, she said. It has the highest sales tax on food in the country and ranks 45th in the nation in fruit and vegetable consumption, she said.
Dunkel noted that the state’s decision not to expand Medicaid — now known as KanCare — under the Affordable Care Act has meant that Kansas now subsidizes other states that did. The loss of federal funds amounts to $12 a second, roughly $866 million since January 1, 2014, she said.
People often say that able-bodied adults should get jobs rather than government relief, Dunkel said, but there aren’t enough jobs to employ the approximately 63,000 unemployed. Surveys show that people in Kansas are increasingly supportive of expansion, she added.
Many of the arguments around expansion have pitted urban against rural and disabled against able-bodies, she said. “That’s not the conversation. The conversation is what can we do that is best for the state of Kansas and for Kansans?”
Human services and education are the two biggest expense items in the state’s general fund, said McKay. But the tax increases of last session and borrowing from other funds is not a sustainable way to handle the budget, she said.
That borrowing has largely cleaned out the Children’s Initiative Fund for early education, bringing its balance from $200 million to about $140,000 she said. And borrowing from the state highway department means that the state can only repair 200 miles of road per year now, compared with 1,200 miles per year before the money was diverted, McKay said.
The panel urged the clearly supportive audience of about 80 to get friends and acquaintances to contact their state lawmakers.
Read more from the Kansas City Star here.