A commentary by Nick Levendofsky, WFU Government Relations Associate.
From the battles of the Civil War that ended slavery to the landmark Brown v. Board of Education case that integrated public schools, Kansas played a key role in civil rights for decades. Kansas produced statesmen like Pres. Dwight D. Eisenhower and Sen. Bob Dole, men who knew they had to work across the aisle with their political rivals to accomplish policies that worked for society as a whole.
Then we come to modern day Kansas. I am a native son of the Sunflower State, but following the 2010 takeover by Gov. Sam Brownback and like-minded ideologues in the Kansas Legislature, it has become more difficult to proclaim my Kansas pride.
Under Gov. Brownback’s leadership, Kansas underwent an extreme experiment in tax reform. Soon after his election, Brownback began pushing for corporate income tax cuts in the hopes that it would spur financial growth and prosperity. The result has been the opposite – the “shot of adrenaline to the heart of Kansas’ economy” touted by Brownback ended up being more like a shot of morphine.
The state’s credit rating was downgraded three different times. Falling tax revenue, depletions of the state’s cash reserve, ongoing diversion of highway funds to cover shortages in the state’s general fund, and underfunding of pensions are all realities of this short-sighted tax policy.
The rosy predictions about job growth and increased business investment have not materialized. Tax collections have fallen short of expectations for 10 of the past 12 months, even after projections were lowered. The recent July 2016 report showed a revenue shortfall of $12.8 million. State leaders have scrambled to make budget cuts ten different times, borrowed from future budgets, and raised taxes and fees in order to offset the loss of income tax revenue.
What does this mean for the working Kansans who are left to pay the bill? To put it into visual terms, the three-legged stool of Kansas taxation now has a much shorter income tax leg, and two growing property and sales tax legs. Kansas leaders decided to pay for their income tax cut plan by increasing sales taxes and eliminating common tax deductions used by Kansas families, such as the child and dependent care income tax credit and deductions of medical expenses. Lawmakers also reduced the deduction homeowners and landowners can take for mortgage interest and real estate and personal property taxes.
The largest tax increase in state history was needed to balance the state’s budget in 2015, as the Legislature raised the state sales tax to 6.5 percent. This gives the Sunflower State the eighth highest average sales tax rate in the U.S., when coupled with local sales taxes.
Since 2012, cuts in state aid to local governments have forced increases in property taxes in a majority of Kansas counties. Since the income tax cuts went into effect in 2013, 67 of 105 Kansas counties have raised property taxes. Statewide, property taxes increased by nearly 8 percent from 2008 to 2014. These state aid cuts hit Kansas’ rural counties much harder because of their smaller population and tax base. Seventeen of the 20 highest recent property tax increases occurred in rural counties.
Essentially, taxes went up for the bottom 40 percent of Kansans, those making less than $42,000 per year. Middle-income families have seen a small tax cut of $29 to $319. Those making between $107,000 and $500,000 received $1,000 to $3,500 in tax breaks, and the folks on top really cashed in. Individuals making more than $500,000 annually pocketed average tax cuts of $25,000. One suburban Kansas City lawyer who was asked what he’d do with his sizable tax cut said he was going to Cancun. He took his family to Mexico — courtesy of Sam Brownback and the Kansas Legislature’s folly. Kansas didn’t see one dime of that money return to its economy.
Brownback and his supporters have doubled-down on their belief that the sun is still shining in Kansas, but their sunglasses have become rose-colored. A tax cut always sounds good, but it has to work, and what Brownback and the Kansas Legislature have done isn’t working. Brownback and his hardline supporters left moderation and common sense at the door when they embarked on their “real live experiment” that has sucked the life out of Kansas.
Some in the Wisconsin legislature have taken notes from Brownback’s play book and chipped away at income taxes. Data shows the credits will cost the state at least $275 million in additional lost tax revenue over the next two years. The singular focus on slashing taxes has taken the state from a billion dollar surplus to a nearly $2 billion deficit, leaving a gaping hole in the state’s transportation fund, and forcing farmers and homeowners to pay more in property taxes to keep the lights on at their local schools.
There may still be time to turn things around, and it starts with the election this November. Voters should educate themselves on each candidate on the ballot, hold them accountable, and make sure they are looking out for the best interests of the state of Wisconsin.
Nick Levendofsky is Government Relations Associate for Wisconsin Farmers Union, a member-driven organization committed to enhancing the quality of life for family farmers, rural communities, and all people through educational opportunities, cooperative endeavors, and civic engagement. For more information visit www.wisconsinfarmersunion.com.