April 8, 2016
Former budget director Duane Goossen said here Thursday that Kansas was “broke,” and after the 2012 income tax cuts, the problem would not be fixed soon.
Exempting 330,000 personal businesses from the income tax caused revenue “to plummet,” Goossen said, and shifted the tax burden to low-income Kansans. He spoke to 85 people at a meeting sponsored by Save Our Schools-Cowley County.
“We’re not playing with a full team,” said Goossen’s colleague, Annie McKay, executive director of the Kansas Center for Economic Growth. She said the individual income tax used to make up 40 percent of the state’s revenue.
She and Goossen spoke at the Winfield High School cafeteria.
The title of their presentation was “Begging, Borrowing and Stealing: Kansas’ Failed Tax Plan. They showed a slide of a big hole in the ground and described the so-far-inadequate efforts by the Brownback administration and the legislature to fill the hole in the budget. Goossen put his tall frame in a semi-crouch and rued the way lawmakers are “scrunched down” looking for money rather than asking how Kansas can invest for the future.
“We are living day to day to day,” he said. “How do we invest in quality education and such things as improved highways?”
Goosen marveled that a conservative legislature would resort to raising the sales tax to make ends meet, as the Constitution requires. He compared the state’s finances to those of a family. When expenses are “way up here,” he said, gesturing with one long arm, and income is “way down here,” putting his other hand down low, “you know you’re in trouble.”
Responding to a question from the audience, Goossen said it was the gap between revenue and expenses that led rating agencies to downgrade Kansas’ debt. The legislature has cut spending for schools and other programs, he said, but has not successfully closed the gap. The current budget is still unbalanced.
“When we get to June 30th, the state’s going to be more than $30 million in the hole,” Goossen said. The hole is likely to be larger next year, he added.
When he asked his audience if the governor’s tax plan was working, a loud “No” emerged from his listeners. He asked again and the “No” grew louder.
Goossen was not specific about the impact of budget cuts on schools, but he accused the legislature of cutting school aid and then fixing the cuts in block grants. He said after his talk it was a shame school districts were suffering but reluctant to let the public know.
The impact of sweeping over a billion dollars from the highway fund into the general fund was spelled out by McKay. She said the state formerly did repairs on 1,200 miles of highways each year and could get around the state in eight and a half years. Now the state is doing repairs on 200 miles of highways a year and will take 50 years to get around the state.
Sweeps from the “tobacco money,” which comes from the settlement of a lawsuit over the costs of smoking, has brought the Children’s Initiative Fund, which aids children and their early education, down to $140,000, according to McKay. The fund formerly held $200 million, she said.
McKay and Goossen emphasized what they saw as the sad reality that damage to schools and support for children would hurt Kansas for many years. The public schools are the state’s “workforce development system,” McKay said, and neglecting them is sure to damage the state’s economy in the future.
Neglecting the state’s infrastructure will take many years to remedy, she added.
Goossen said the only way to justify the behavior of the legislature and the governor was to conclude their goal was to shrink state government until it was ineffective. He did not accuse anyone of wanting to do this, however. McKay added that Kansas embraced the theories of Arthur Laffer more completely than any other state, suggesting the motive for all this trouble was simple misjudgment.
Laffer expounded a theory that cutting taxes would stimulate the economy and increase revenue to the state.
The governor’s suggestion, raised by an audience member, that a slow regional recovery in the agricultural and oil and gas sectors explained Kansas’ budget problems drew a strong response from Goossen.
Revenue from the severance tax on oil and gas makes up only 1 percent of state revenue, he pointed out. “Commodities and oil and gas have nothing to do with it,” he said, speaking of the budget shortfall.
Eilene Hawley, the governor’s spokesperson, disagreed. “With the downturn in commodities and agricultural prices,” she said, “farmers’ income is down, and as a result, they are spending less. This affects both income and sales revenue for the state.”
USD 465 Superintendent J.K. Campbell asked about a recently drafted bill with a new school finance formula, and attributed it to Sen. Steve Abrams of Arkansas City.
The bill includes state funding for non-public schools.
Abrams, in a telephone interview Friday, said he had assisted in drafting the bill and that its prospects for hearings this year depended on the leadership.
“I wanted to put it out there for discussion,” he said.
Larry Hahn, a member of the steering committee of Save Our Schools-Cowley County, emceed Thursday’s presentation and encouraged citizens to volunteer in the public schools. After speaking, Goossen and McKay said they were impressed by the well-informed questions of the Winfield audience.
Read more from the Winfield Courier here.