(Syndicated to Kansas newspapers Dec. 15, 2014)
Gov. Sam Brownback: Fiendishly clever…or not.
Boy, how often do you get to write that about a governor?
Here’s how this shakes out.
Brownback, of course, signed into law massive income tax cuts two years ago, and while the cuts were bigger than he wanted, he’s got them. And, for a very conservative governor, he is safely into a second four-year term (unless some more attractive job pops up).
From that position, Brownback can pretty much decide how much government he wants Kansas to have. Brownback is a small government guy, or at least a smaller government guy.
So, he’s proposed that because the state can’t spend more money than it takes in each year, he’ll meet this year’s projected $278 million shortfall largely by drying up all the excess cash sitting around in state agencies. His tactic? Transferring about $200 million in those funds—ranging from the Bank of the Kansas Department of Transportation to new appropriations to the state’s pension system to the State General Fund, and actually cutting some expenditures this fiscal year.
If the Legislature goes along, Brownback will have met the duty to balance the state budget…and drained the state of virtually all spare change for use in the upcoming fiscal year.
If the Legislature goes for the plan (and some lawmakers want to go back into this year’s budget and make cuts, which Brownback is expected to discourage), Kansas will have to finance next fiscal year’s budget, which starts July 1, with just the tax revenues it takes in.
We’re looking at estimated spendable revenues for the upcoming fiscal year of $5.8 billion, compared to the $6.3 billion that the Brownback plan would see spent for this fiscal year which ends June 30.
Just doing the subtraction won’t show it, because there are other expenditures that are automatically going to rise, but it means the state will have to cut about $650 million from this year’s comfortable budget. That’s a dab over 10 percent in cuts that legislators will be looking at in the upcoming session.
If you’re a fan of smaller government, this is a brilliant ploy. If you’re not a fan of smaller government, well, Brownback has made sure you’ll have to prove it by raising revenues while mid-term Brownback gets to watch what sort of campaigns lawmakers muster for election to the House and Senate.
Here’s where the fiendishly clever business may come into play.
Brownback can suggest a budget that makes those cuts to keep the state in the black, which automatically means dramatic spending cuts or program shrinkage, or the elimination of programs…or he can restructure the state’s taxes to finance a smaller cut in state spending.
That’s taxes, yes, but taxes Brownback is interested in. Not income taxes, of course, or any increase in corporate taxes, but maybe sales taxes. And, hey, they’ll gripe, but cigarettes and booze probably don’t cost what they’re worth if you gotta have them…
Oh, and remember that there is more than $6 billion in economic activity that is exempt from sales taxes including most services ranging from legal and accounting to, apparently, lap dances, but nobody’s ever gotten a receipt for those…
So, it appears that Brownback is putting legislators into the position where they approve the spending cuts that are in the future—and how often have we heard the phrase “living within your means”—or finding some new revenue source. Or, of course, just not financing services Kansans demand, which means local units of government will have to pick up the cost of those services which means higher local property taxes or fees or some such.
This might just be devilishly clever. Or not.