Kansas Gov.-elect Sam Brownback said Friday he’s looking for bold action on taxes next year and sees lowering the state’s individual income taxes as crucial for economic growth.
In an interview with The Associated Press, the incoming Republican governor said he’s convinced the state’s income tax rates impede job creation and discourage people from moving to Kansas.
“The individual income tax is, probably of any thing, the most sensitive area to growth,” Brownback said. “What I’m interested in is reducing those taxes that hinder growth in Kansas, and not all tax cuts are created equal when it comes to growth policies.”
He said while Kansas draws people from states with higher income rates, it loses far more, and he wants to reverse the trend, “to attract people and their capital and the chance at creating jobs.”
“I think we need to be pretty aggressive and bold on tax policy. That’s the piece the state can do, is create the environment that is growth oriented,” he said, adding that the state still must collect enough revenue “to keep the machinery running of the state.”
Brownback’s new administration faces a potential budget shortfall of nearly $500 million, with more than 100,000 Kansans out of work. He will have a strong Republican majority in both chambers of the Legislature to push his agenda, which he said includes protecting funding for public education. Republicans will hold a 31-9 margin in the Senate and 92 of the 125 House seats come January.
“I do think it is an extraordinary moment. The key in my estimation is to do wise things that make sense on a long-term basis and not to do things that are an overreach or the people don’t overall support,” Brownback said.
Part of the tax strategy includes creating rural enterprise zones aimed at revitalizing counties losing population. He proposes to give people moving to rural counties an income tax break for the chance to move back home and create jobs.
Brownback said he would prefer not to use the government accounting moves governors and legislators have routinely used for the better part of a decade. Rather than shifting excess funds in agencies or money dedicated to highways, he wants to restore stability with a healthy revenue cushion in the bank.
“I would like to get us back to the point where we’re not sweeping funds,” he said, acknowledging such conditions may be two or three years away.
Brownback said he would like to tweak the state’s school finance formula in the short term to give districts more flexibility to use reserve funds to pay operational expenses. Doing so would help offset some of the losses in federal funds coming in 2012 when stimulus dollars dry up. But he said he wouldn’t suggest local districts be required to raise more revenue through local property taxes to cover the shortfalls.
Brownback also wants to look at new ways for administering Medicaid programs in Kansas. He suggested that the state could contract with community or county health clinics to provide basic services, including preventive care such as monitoring diabetes, nutrition and high blood pressure.
The goal would be to reduce the state’s Medicaid costs in check as the federal government prepares to reduce spending.