Archive for Tuesday, April 19, 2016

Republican lawmakers lose patience with Brownback tax cuts amid budget crisis

Kansas Gov. Sam Brownback addresses legislators Tuesday, Jan. 12, 2016, in his State of the State address.

Kansas Gov. Sam Brownback addresses legislators Tuesday, Jan. 12, 2016, in his State of the State address.

April 19, 2016

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— After he became Kansas governor in 2011, Sam Brownback slashed personal income taxes on the promise that the deep cuts would trigger a furious wave of hiring and expansion by businesses.

But the "shot of adrenaline" hasn't worked as envisioned, and the state budget has been in crisis ever since. Now many of the same Republicans who helped pass Brownback's plan are in open revolt, refusing to help the governor cut spending so he can avoid rolling back any of his signature tax measures.

If Brownback won't reconsider any of the tax cuts, they say, he will have to figure out for himself how to balance the budget in the face of disappointing revenue.

"Let him own it," Republican Rep. Mark Hutton said. "It's his policy that put us there."

Tax collections missed projections in 11 months of the last year. A growing number of Brownback's conservative allies want to scale back the tax cuts to ease the budget crunch.

Brownback took office on a pledge to make Kansas friendlier to business and successfully sought to cut the top personal income tax rate by 29 percent and exempt more than 330,000 farmers and business owners from income taxes. The moves were popular in a Legislature where the GOP holds three-quarters of the seats.

The governor argued that Kansas had to attract more businesses after a "lost decade" in the early 2000s, when private sector employment declined more than 4 percent.

The predicted job growth from business expansions hasn't happened, leaving the state persistently short of money. Since November, tax collections have fallen about $81 million, or 1.9 percent below the current forecast's predictions.

"We're growing weary," said Senate President Susan Wagle, a conservative Republican from Wichita. While GOP legislators still support low income taxes, "we'd prefer to see some real solutions coming from the governor's office," she said.

Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years.

Lawmakers are worried about approving any further reductions in an election year. All 40 Senate seats and 125 House seats are on the ballot in November.

Democrats have long described Brownback's tax cuts as reckless. Republican critics want to repeal the personal income tax break for farmers and business owners to raise an additional $200 million to $250 million a year.

Debate over the next budget will intensify after lawmakers return from a recess later this month. They could follow through on their threat by adjourning without making specific reductions and leaving the governor with the authority to do so. He faces fewer repercussions because he will not appear on the ballot again before leaving office in January 2019.

Brownback rejected earlier calls to scale back the tax cuts and shows no signs of backing down.

He declined to be interviewed about the lawmakers' unusual demand until new revenue projections are released Wednesday. Spokeswoman Eileen Hawley said the governor will release proposals afterward for balancing the budget, but, "a plan to raise taxes on small businesses or anyone else will not be among them."

Brownback blames the economic sluggishness — the state ranked 43rd in total personal income growth in 2015 — on slumps in agriculture, energy production and aircraft manufacturing.

"You've got some global issues that are going on that we have absolutely no control over," Brownback told reporters at a recent news conference.

But Scott Drenkard, an economist for the conservative Tax Foundation, told legislators last month that farmers and business owners appeared to pocket the extra money from the state's recent tax cuts rather than use it for expansion — "tax avoidance, not job creation."

The state's personal income tax collections dropped 24 percent during its 2014 budget year, down $713 million. They've increased since, but the official projection for the 2017 fiscal year is less than $2.5 billion — still 15 percent off the 2013 peak.

Meanwhile, Kansas reported gaining only 800 private-sector jobs between March 2015 and March 2016, a mere 0.1 percent increase.

Last year, legislators plugged part of the budget gap by increasing sales and cigarette taxes as part of a $400 million revenue-raising package.

Brownback's administration has floated the idea of selling off the state's rights to future tobacco settlement payments, but lawmakers have been cold to such borrowing.

The continuing budget turmoil has been "just amateurish," said Republican Sen. Jim Denning, a former conservative ally of Brownback's who has become a critic. "I'm not happy with how things played out."

Comments

Calvin Anders 1 year, 5 months ago

Brownie is behaving like a meth addict, selling off everything that's not nailed down and looking to steal from any unprotected source of revenue around him. It's hard to take conservative legislators at their word when have gone along with Brownie's slash and burn approach for so long. It was unsound policy when he rolled it out. It's not like the plan was clever and forward thinking when he pushed it through. This plan was always a thinly veiled scheme to take food away from needy children, take services away from those most in need, hobble the schools and hobble state agencies all in the name of rewarding the wealthy with huge tax breaks. No one on either side of the isle believed this plan would result in an economic boom. That was always just a convenient lie to make the endeavor seem constructive. Now, the legislature want to absolve themselves of responsibility by claiming they were duped? Well I'm not buying it. Either they are really bad liars or monumentally stupid. Or maybe both.

Bruce Bertsch 1 year, 5 months ago

To our "friends" in the legislature, please remember the words of Colin Powell, "You break it, you own it." It may have been Sam the Sham who proposed the idea but the legislature gladly implemented all of the cuts. Now that the chickens have come home to roost, they want Sam to fix it? Sorry, but the reps and senators are just as culpable as the Guv in this fiasco. If they are truly serious, then they should revoke the free pass given to businesses and then override the certain veto. I will be astounded if they have the courage to do what is right for all of Kansas.

Brett McCabe 1 year, 5 months ago

Rats from a sinking and burning ship. Mr. Brownback? Meet Mr. Bus.

Armen Kurdian 1 year, 5 months ago

@Randolf, accusing the whole purpose of the tax cuts as being intentional to making children hungry and throwing people out on the streets is not helpful. Inflammatory language begets more inflammatory language.

Tax. Reform. When 45% of the American electorate pay no federal income tax, when corporate tax rates are the highest in the world, when special interests get into the tax code making anti-competitive behavior codified legislatively by allowing some profitable companies to get away w/paying no tax and others to pay high tax, when there is a self-employment tax of 15% right off the bat for new entrepreneurs, and where the entire tax code is centered around income vice consumption, you're not going to get economic growth. This is another reason why this national 'economic recovery' has been so ridiculously weak over the last 6 years.

John Kasich gets it. The other four remaining candidates don't. But Kasich doesn't scream and yell and cater to the extreme like the other four. He actually has everything thought out and puts together the best most intelligent positions, which sadly, is probably why he's at the bottom right now. Unless a miracle happens, we're going to have a crappy President in the next four years.

Michael Shaw 1 year, 5 months ago

It is Kansas, not the country as a whole, that has had no economic growth.

Brett McCabe 1 year, 5 months ago

What some people don't know, they'll never learn. I'm constantly amazed at the doubling-down on bad ideas.

Armen Kurdian 1 year, 5 months ago

KS not doing well, but neither is the country as a whole, with labor participation rates at historic lows, growth last quarter only 0.7%, manufacturing jobs getting sent overseas, sometimes due to lower cost, sometimes because you can't find the skilled labor, and tax policy that tries to pick winners and losers. Some states are having success, such as TX, OH, & SC despite national issues. But there is no reason why the country as a whole should not be experiencing consistent 4% GDP growth w/250K jobs created per month.

Tom Weiss 1 year, 5 months ago

The US has hardly ever experienced growth of 4% per year, and when it did the pop0ulation and labor force were growing more quickly than they are now, so GDP per capita grew more slowly. The average growth of real GDP per capita has been only around 1.5 percent per year for a very long time. And, since the Bush recession, it has been growing roughly at this long term rate.
So Brownback's policies designed to turbo charge the KS economy has in fact done no such thing, and KS is lagging behind the national economy, which has managed to do reasonably well despite all those Obama policies that Republicans think were harmful. And reasonably well despite every effort of Republicans to hold the economy in check.

Bob Forer 1 year, 5 months ago

John Kasich gets it??????

You have got to be kidding. He is a one percenter and in bed with his buddies when it comes to tax giveaways to the wealthy.

Calvin Anders 1 year, 5 months ago

Well, Armen, if I were trying to be all inclusive and open arms to the Republican legislators, I might have to agree with you. But my point is not to welcome these jackals to the side of reason and enlightenment. My point is that the legislators are not sincere in their contrition. These guys are trying to shift blame for the mess Kansas is in to Brownie and avoid responsibility. It kind of takes the edge off my whole point about them being sneaky, underhanded, cowards and theives, if I fail to point out that they knew full well they were taking food out of the mouths of hungry children.

Barb Gordon 1 year, 5 months ago

We're not talking about Romney's tired misconceptions about federal taxes. We're talking about state taxes right now, and some of the people not paying them in Kansas are billionaires. Is that the reform you had in mind?

Richard Quinlan 1 year, 5 months ago

Wagle et al , what a bunch of cowards , you passed it , you can repeal it , then override Wrongway Corrigans veto. Pretty simple , quit whining and do your job.

John Sickels 1 year, 5 months ago

What this tells me is that even some of the conservatives are feeling the heat from their constituents and are starting to worry about their re-election.

The school districts are the largest employers in many small towns, as are the rural hospitals. They are all suffering with the budget cuts and the refusal to expand Medicaid and they can't hold out much longer. Brownback policies will destroy thousands of jobs in rural Kansas and the constituents are figuring this out.

So, it boils down to this: will the house and senate listen to their voters, or will they keep listening to arsenic-oil salesmen like Trabert and the delusional puppet governor?

Bob Forer 1 year, 5 months ago

That's what it is all about, John. It is all about getting reelected. All these scoundrels care about is perpetuating their power. They don't give a damn about their constituents. They lick the boots of their large contributors.

Ginny Blum 1 year, 5 months ago

I guess those folks are just now figuring out that they, employees of the school districts and rural hospitals are the enemy? Did they think their rice bowl was iron when all those leaches were being shed from state welfare roles?
Wasn't that what they intended when they voted for him and his like in the legislature? The legislature can push this off on the Governor, but they, the voters built the machine that wants to rid the Kansas economy of public employees and services in the name of some greater good.

Phillip Chappuie 1 year, 5 months ago

The Laffer spin doesn't twirl anymore. It was never going work. Too many of the so called representatives of the people that work in the Capitol building gave the Governor the green light to continue his glide path to privatization of as many services as he could trick them into in the allotted time. The tax scheme was in part one of the phoney mechanisms to get there. Reduced revenue forces cuts to necessary services and they get in trouble so then that is the excuse to sell if off the highest bidder. KanCare anyone? How is that working out for us? Thousands of Kansans have reduced services or no access to services so the big three can make money. Reinstate the incomes taxes. Put SRS back together. And move on.

Steve King 1 year, 5 months ago

So Armen...what percentage of your 45% are retired, disabled, children, students, Wal-Mart workers? You present the same lame argument Romney did.

Bob Forer 1 year, 5 months ago

''After he became Kansas governor in 2011, Sam Brownback slashed personal income taxes on the promise that the deep cuts would trigger a furious wave of hiring and expansion by businesses.'

Sam Brownback was hardly alone in this. First, the legislature had to pass the tax cuts, and then, and only then did Brownback, as governor, sign them into law.

The fools who voted for the tax cuts own them, along with their buddy Brownie.

The solution is quite simple. If the tax cuts are hurting Kansas, then repeal them. Only then can they place blame on Brownie if he vetoes a repeal.

If they had any guts, that is what they would do. But they are spineless scoundrels who stuff their campaign treasuries from the same trough as Brownie. Complaining won't separate them from the manure that binds them to Brownie. Only action can do that, and they are already beholden to the Kochs. The only solution is for Kansans to vote every last one of these pigs out of office.

Dorothy Hoyt-Reed 1 year, 5 months ago

They are only trying to back track on the mess they have created, because they want be get reelected. Don't let them fool you!!! Brownback didn't do this "experiment" on his own. They helped him and it is working just as they planned. They could care less about Kansas. They will try and back off to get reelected, but then they will turn around and stab the middle class and poor of Kansas in the back. Keep the finger pointed at them. Either the finger of shame or whichever finger. Do not let them off the hook.

Randy Frazer 1 year, 5 months ago

I have thought a lot about the current income tax policy and why it hasn’t put a “shot of adrenaline” in to the Kansas economy. This tax policy has also shifted the tax burden to other sources, namely those citizens with the least ability to pick up the tab through a state sale tax increase in 2015. First of all I want to say I don’t believe government should put a heavy tax burden on any citizen or business and should always be as efficient as possible, but we all expect certain services, like education, quality transportation infrastructure, and responsive public safety organizations that only properly funded government can provide. I truly believe the current Kansas tax policy will never have a significant boost to the economy and here is why. Why would a business before the current tax laws were enacted even pay income tax? It was because the business was profitable, a profitable business is usually managed very efficient, has the correct staffing level, equipment, and facilities needed conduct business in a profitable manner. A business that paid any income tax pre 2012 would have been showing a healthy profit after using the tax deductions that were available at that time, so my belief is a healthy profitable business is not likely to be encouraged or even need to hire more people, buy new equipment or any other economy boosting activity just because they no longer pay income tax. The businesses that needed a shot of adrenaline probably were not paying any income tax prior to 2012 due to the fact they were not profitable and this taxing policy will have no effect on them at all.
A profitable business needs educated employees, it needs good transportation infrastructure to receive raw materials and ship finished products to the market, and numerous other services the state government provides. Profit in business is a great thing and government should not over burden a profitable business with high taxes but a profitable business is required to pay for the goods and services it uses from a private sector business and a profitable business should feel the same obligation to pay for the services it uses from the public sector through a fair income tax.

Carol Bowen 1 year, 5 months ago

"Lawmakers are worried about approving any further reductions in an election year. All 40 Senate seats and 125 House seats are on the ballot in November."

Getting re-elected. What a lofty goal.

Michael Kort 1 year, 5 months ago

I took one look at brownies picture above and I wondered what in the heck that he was saying ?????????

I could just imagine him doing a cheap magicians trick of hypnotizing his audience, into believing that they are all chickens, while the two that sit behind him, try to conceal their amusement, at a room full of adults.......all clucking like stupid bird brains, in unison ?

Or maybe brownie is just telling his spell bound audience, In a rythmic repeating voice.......the budget is balanced.......the budget is balanced........the budget is balanced !!!! ..........Even though we all know better .

Or maybe it's the "Sermon On The Hill", where brownie "the prophet-medium", will channel "The Two Headed God", also known, as Charles and David ?

Oh well, it is a better picture than the usual one of him sitting on his green couch with his matching green tie .

Michael Kort 1 year, 5 months ago

This November vote their Re-Publican rear ends out !!! The Re-Publicans have screwed things up deliberately.....and enough is enough is enough !!! Get Re-Publicans out of your life....... and your government..... and tell the greedy to take a hike !!!

Richard Heckler 1 year, 5 months ago

These republicans are only putting on a show for election season. They don't give a damn.

Never Vote Republican Again - they cannot be trusted.

Fred Whitehead Jr. 1 year, 5 months ago

Do you see the ignorant, foolish circus that the Republican Party is supporting for being a candidate for President of the United States, Commander in Chief of our armed forces, leader of the Free World? Do you see the destruction that is on the horizon of this fool is elected?

Are you concerned for the future of our democratic process and the future of our country?

Now, does Brownback come in to clear focus????

Richard Heckler 1 year, 5 months ago

How are the other GOP presidential candidates any different than Trump?

I say not one is different. If anyone believes Trump is the only radical among them people need to do a lot of homework. Everyone of the candidates is another Sam Brownback. Paul Ryan was trained under Sam Brownback.

take a look at Kasich making life hell for women:

http://www.motherjones.com/politics/2015/07/wolf-sheeps-clothing-gov-kasichs-reproductive-rights-record

bad for working families:

http://www.aflcio.org/Blog/In-The-States/5-Reasons-Why-John-Kasich-Is-One-of-the-Worst-Candidates-for-Working-Families-in-the-2014-Elections

Richard Heckler 1 year, 5 months ago

Sam Is setting up Kansas for bankruptcy. That's right bankruptcy. All premeditated before Sam was elected governor. Bankruptcy is an ALEC agenda item for all state governments as a means to justify privatization.

Shouldn't ALEC politicians be subject to federal investigations?

And remember that so called GOP legislators have been with Sam since day one.

Never Ever Vote GOP Again !

Richard Heckler 1 year, 5 months ago

How will the Brownback administration pay back KPERS?

Looting the Pension Funds All across America .... Wall Street is grabbing pension money meant for public workers

http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926

KPERS is probably not as safe as investors think? Not with ALEC politicians at the wheel.

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