The ongoing financial crisis here in Kansas, which has apparently come as a surprise to some, is becoming much more real to others who are directly impacted. Though some are quick to either blame the Revenue Estimators or point to low commodity and livestock market prices and the plunge of oil and gas values to explain how we got into this mess, in reality, these economic factors are tied to cyclical ups and downs that we should have the capacity to weather if we managed well and made good fiscal policy decisions. Instead, one only has to go back a few years to the Governor’s great experiment to blow up what had been for decades a very successful tax policy.
Unfortunately, this experiment was nothing new. Trickle down economics has been tried, and has failed, many times before. So you wonder, if that is the case, then why would we implement something with a failed track record? I, along with many others, am beginning to believe that it was never intended to work—that the silent objective was to slowly starve state government and use the complaints about government not delivering to cut government even more. There is no discussion from the far right Republican leadership in Topeka about corrective action being on the table. They are getting what I fear they wanted.
The March $17 million cut to public higher education in Kansas was tied directly to the February decline in revenue of about 50 million dollars. We now have less than four months to go in the 2016 fiscal year, meaning with each passing month there is less and less time to make adjustments to end the year in the black. As I mention in a previous blog post, the period after a major tax policy change is typically a challenging time to accurately predict revenue. So (as Duane Goossen of the Kansas Center for Economic Growth accurately points out), rather than blaming the Consensus Revenue Estimators, one must look at the tax policy itself and ask the following questions: What if there are further declines in revenue? What about the next fiscal year? When is the leadership in Topeka going to be honest with the people of Kansas, accept responsibility for making mistakes, and start us on the road back towards sanity?
These monthly financial shortfalls will likely continue, forcing more and more cuts to public education. And why do I say that? Financial management of the budget in recent years has ignored the value of following the law and having a reasonable surplus to deal with monthly declines in revenue that happen, even in good times. If the current administration had followed the law on carry-over, there would be no immediate crisis from declining February receipts. We would have budgeted something in the neighborhood of $750 million for such a purpose, and the $50 million decline would not have made headlines—let alone resulted in the robbing of our state’s future in order to pay for the same old mistakes of the past.
Unfortunately, this experiment was nothing new. Trickle down economics has been tried, and has failed, many times before. So you wonder, if that is the case, then why would we implement something with a failed track record? I, along with many others, am beginning to believe that it was never intended to work—that the silent objective was to slowly starve state government and use the complaints about government not delivering to cut government even more. There is no discussion from the far right Republican leadership in Topeka about corrective action being on the table. They are getting what I fear they wanted.
The March $17 million cut to public higher education in Kansas was tied directly to the February decline in revenue of about 50 million dollars. We now have less than four months to go in the 2016 fiscal year, meaning with each passing month there is less and less time to make adjustments to end the year in the black. As I mention in a previous blog post, the period after a major tax policy change is typically a challenging time to accurately predict revenue. So (as Duane Goossen of the Kansas Center for Economic Growth accurately points out), rather than blaming the Consensus Revenue Estimators, one must look at the tax policy itself and ask the following questions: What if there are further declines in revenue? What about the next fiscal year? When is the leadership in Topeka going to be honest with the people of Kansas, accept responsibility for making mistakes, and start us on the road back towards sanity?
These monthly financial shortfalls will likely continue, forcing more and more cuts to public education. And why do I say that? Financial management of the budget in recent years has ignored the value of following the law and having a reasonable surplus to deal with monthly declines in revenue that happen, even in good times. If the current administration had followed the law on carry-over, there would be no immediate crisis from declining February receipts. We would have budgeted something in the neighborhood of $750 million for such a purpose, and the $50 million decline would not have made headlines—let alone resulted in the robbing of our state’s future in order to pay for the same old mistakes of the past.
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