Sept. 27, 2017
Recently passed comprehensive tax reform legislation (Senate Bill 30), coupled with Governor Brownback’s upcoming departure to a new federal post, has marked an end to the Brownback era and its signature tax cuts. The 2017 comprehensive tax reform plan was the first step in putting Kansas back on the road to economic recovery. A new report from the Kansas Center for Economic Growth (KCEG), however, shows the long-lasting damage of the 2012 tax experiment on the Kansas economy, especially the negative impact on local communities and the services their community members need to thrive.
The new “Aid to Locals” report demonstrates the detrimental impact cuts to local aid have had on health care in Kansas and suggests how to get Kansas back on track. The report highlights the negative consequences of decreased state funding on local communities’ ability to provide health care resources to its residents. Following sharp declines in income tax revenue following the 2012 tax cuts, local governments have had to shift to less reliable streams of funding, like fees and grants, to pay for health care services. In fact, over 43% of Kansas counties have seen a drop in county tax revenue as a share of overall health spending.
Mental health services, in particular, have been substantially jeopardized by the 2012 tax cuts implementation. From the report:
- In addition to undergoing cuts to balance the Fiscal Year 2016 budget, community mental health centers (CMHCs) have had to maintain public health standards despite flat funding since the recession. After adjusting for inflation, CMHC funding from the local level is down over $3 million, and nearly 66% of counties have reduced their investments.
- Not only are CMHCs dealing with a decrease in funding, but they are also experiencing staffing shortages. Budget cuts, which targeted CMHCs, resulted in massive job loss – approximately 200 positions were expected to be eliminated in 2016. 
During the 2017 session, the Kansas Legislature diagnosed the 2012 tax cuts as the leading cause of Kansas’ poor economic health and well-being, and took strides to alleviate the damage with comprehensive tax reform. However, more work is needed at both the local and state level to mend the damage done and rebuild healthy and strong communities.
One prescription to help counter the decrease in local aid for health care funding is to expand KanCare. Expanding KanCare would help local health departments and CMHCs, as well as provide newly covered Kansans better access to health care and mental health treatment. In addition to increased access to health care, the additional resources KanCare expansion provides would result in both increased employment and economic development opportunities in communities that are currently suffering from underinvestment. KanCare expansion is one of
many antidotes that would help to reverse the trends in local funding for the health care services that are essential for sustaining healthy Kansas communities.
While the Kansas Legislature began to reverse the damage caused by the 2012 tax policy experiment by passing Senate Bill 30, Kansas communities are still struggling to recover. Overcoming the failed tax experiment requires continued work and reinvestment in local communities so Kansans can lead healthy and productive lives.
Emily Fetsch is the Kansas Center for Economic Growth’s policy and research analyst.
 See Associated Press, “Kansas Budget Cuts Force 200 Layoffs at State Mental Health Centers.” Modern Healthcare. August 2, 2016. Available online: http://www.modernhealthcare.com/article/20160806/NEWS/308069940