Kansas Gov. Sam Brownback said Tuesday he plans to stay in office until he is confirmed by the U.S. Senate for a diplomatic post in the Trump administration, something he said he hopes will happen as early as next month.
Brownback has been nominated by President Donald Trump to be the nation's ambassador at-large for religious freedom, a post housed in the State Department. Speaking informally with reporters Tuesday at the Statehouse, Brownback said he has had conversations with Senate leaders and believes he has bipartisan support for the position. He also said he hoped his confirmation could be completed in September.
The schedule for his Senate confirmation has not yet been announced and probably won't be announced until Congress returns from its August recess. It is expected that the process will begin with the Senate Foreign Relations Committee, which is chaired by Sen. Bob Corker, R-Tenn.
A swift confirmation would be helpful to Lt. Gov. Jeff Colyer, who will succeed Brownback in the governor's office once Brownback resigns, because it would give him a running start in preparation for the 2018 legislative session.
During this year's session, lawmakers passed a two-year budget for state government, but there are always tweaks that need to be made in the second year. Sept. 15 is the deadline for most state agencies to submit their budget requests for the upcoming fiscal year. After that, the next official revenue estimates are due in early November. Those are used as the basis of the budget proposal the governor makes to the Legislature in January.
Colyer has been in a somewhat awkward position since Brownback announced in July that he planned to accept the ambassadorship. Trying hard not to upstage Gov. Brownback during his final days or weeks in office, Colyer has quietly been putting together his own management and campaign teams while also avoiding the news media.
Last week, Colyer announced with a press release that he intends to run for a full term as governor. He also announced the appointment of Kansas Republican Party executive director Clay Barker as his new chief of staff, and former WIBW-TV reporter Kara Fullmer as his new press secretary.
Kansas in the spotlight: End of state’s tax experiment resonates nationally as Trump’s plan mimics Brownback’s failure
When Kansas lawmakers overrode Gov. Sam Brownback's veto and reversed course on the tax policies he championed in 2012, it was predictable that the story would be front-page news in all the Kansas papers. What was less predictable was the extent to which the story would resonate nationally.
Much of the attention was certainly due to the fact that President Donald Trump is expected to roll out his own plans for federal tax reform soon, and many believe it will be modeled on the Kansas experiment.
Writers at POLITICO made that connection back in May, when the White House released a one-page summary of Trump's tax plan. "As the White House and Congress begin to debate tax reform and how it could affect the country, they should pay close attention to the plains, where Kansas has suffered fiscal and economic setbacks," the website reported May 4.
"The Kansas Experiment Is Bad News For Trump’s Tax Cuts," a headline on the fivethirtyeight.com blog proclaimed after the override vote. It went on to say the action in Topeka was possibly the most interesting policy news to happen all week, even outperforming former FBI Director James Comey's testimony to a congressional committee two days later.
Money magazine's Ian Salisbury also drew a link between the Brownback tax cuts and the upcoming Trump plan when he wrote, "the Republican-led legislature's reversal makes it trickier for Kansas to serve as a template for national tax reform."
"Donald Trump’s Tax Plan Would Turn the Whole U.S. Into Kansas," proclaimed another headline on Slate.com.
Other news outlets, however, saw the Kansas Legislature's action as a final verdict on the "supply-side" economic theories — dubbed "trickle-down" economics by some and "voodoo economics" by then-candidate George H.W. Bush — that economist Arthur Laffer first sold to the Reagan administration in the 1980s before bringing them to Kansas in 2012, theories that are now said to be forming the basis behind the Trump tax plan.
The New York Times editorial page, which was never a big fan of either Reagan or Laffer, seemed to chortle with its headline, "Kansas Rises Up Against the Trickle-Down Con Job."
Eugene Robinson of the Washington Post even declared that Kansas "proved" how "Trickle-down economics is a nightmare."
But it wasn't just the left-leaning editorial pages that sat up and took notice of what happened in Kansas last week. Even the Brookings Institution, the living definition of centrism, called the vote in Kansas a verdict on supply-side economics.
"The Brownback tax cuts were one of the cleanest experiments the country has ever had in measuring the effects of tax cuts on economic growth, and it showed that they were a failure, wrote William G. Gale, a Brookings senior fellow in economic studies.
"Kansas’ experiment with tax cutting failed spectacularly — on its own terms," proclaimed another editorial in Business Insider.
West coast newspapers also took notice.
"It's the end of the road for the GOP's big tax experiment in Kansas," read a Los Angeles Times headline over a story that began, "The grand economic experiment on the prairie has ended."
It's not often that Kansas politics receives so much national attention, and usually when it does it's because of something the rest of the country frowns upon, like when the Kansas State Board of Education tried to downplay the concept of evolution in state science standards.
In 2014, Kansas briefly drew significant national attention when it looked like Republican Sen. Pat Roberts might be on the ropes for re-election, but that faded pretty quickly after he won by more than a 10 percent margin.
What's different about the tax story is that national news outlets are actually using Kansas as a source of objective facts and data to tell a cautionary tale for the rest of the country. And you can tell they're taking the task seriously by the fact that none of the articles mentioned above made any of the corny "Wizard of Oz" references that are usually obligatory in stories about Kansas.
Despite resistance, lawmakers create foster care task force; Brownback signs four more bills as session nears end
The Kansas Senate sent two significant pieces of legislation to Gov. Sam Brownback's desk on Friday while Brownback signed four bills into law.
Among the bills the Senate passed was one establishing a child welfare task force that would spend the next two years studying the Department for Children and Families' management of the state's child welfare system, and the foster care system in particular, and to make recommendations for improvement.
The bill was prompted by a number of children who were either killed or mistreated while in the custody of the child welfare system. But DCF Secretary Phyllis Gilmore has resisted efforts to impose more oversight, and conservative lawmakers allied with Brownback pushed back against the idea.
The push to establish a new task force comes on the heels of a series of Legislative Post Audit reports that were highly critical of DCF's management of the programs.
The task force would be made up of legislators, court officers, children's advocates, law enforcement officials, social workers and others involved in the child welfare system. That group would break up into a number of working groups to study different aspects of the system, including foster care, family preservation, protective services, reintegration and DCF's general administration of child welfare.
The group would be expected to file a progress report to the Legislature in January 2018, but its final report would not come until January 2019, after the Brownback-Colyer administration has left office.
The bill passed the House Friday morning, 109-10. It passed the Senate a few hours later, 33-6.
The Senate also passed and sent to Brownback's desk a bill dealing with mandatory inspections of amusement park rides. That bill, which the House passed Thursday, delays some enforcement provisions of a new law just enacted earlier in the session making it a class B misdemeanor to operate an amusement park ride that has not been inspected and received a permit by the Kansas Department of Labor.
Meanwhile, Brownback signed four pieces of legislation into law Friday:
• Senate Bill 42, updating and revising portions of the juvenile justice code that underwent a massive overhaul last year.
• Senate Bill 201, amending the Kansas Consumer Protection Act, adding members of the military to the definition of “protected consumers.”
• House Bill 2092, making various changes to Kansas criminal procedure.
• And House Bill 2132, authorizes port authorities to conduct certain sales.
Brownback has now signed 91 bills into law this session and has vetoed three. His veto of an income tax overhaul bill was subsequently overridden this week.
Kansans woke up Wednesday morning to a state that was dramatically transformed overnight in ways that will affect them for years to come.
The Kansas Legislature's decision the night before to override Gov. Sam Brownback's veto of a bill reversing his signature tax policies will have an almost immediate impact on their paychecks. The override will also have long-term effects on the state's ability to fund public schools and maintain its roads. And it will have far-reaching consequences on Brownback's own political legacy and on the political trajectory of the state.
People who work for a paycheck will start seeing smaller checks almost immediately. Starting July 1, employers will start withholding at the new higher rates. For individuals, that means 3.1 percent on the first $15,000 a year of income; 5.25 percent on the next $15,000; and 5.7 percent on any income over that. For married couples filing jointly, the income thresholds are double those for individuals.
Currently, there are only two tax brackets: 2.7 percent on the first $15,000 and 4.6 percent on all income above that. Those were scheduled to go down next year under the so-called "glide path to zero" formula. But while the new rates are higher across the board, they are still lower than they were before the sweeping tax cuts were enacted in 2012.
For wage earners, the new tax rates take effect on July 1. So the increase in rates for tax year 2017 is only half the full amount. But employers will start withholding at the full rate to make up for the fact that the entire increase has to be paid in the second half of the year.
People who are self-employed or own small businesses, however, will want to start doing some tax planning immediately, because for them the new rates are retroactive to Jan. 1. Those are the roughly 330,000 people who, since 2013, have not paid any state income taxes on their nonwage business income under what came to be known as the "LLC exemption."
In addition to the higher rates, however, the law also phases back in some deductions and exemptions that were either reduced or eliminated under the 2012 tax plan, starting with deductions for medical expenses, mortgage interest and property taxes paid. It also will phase back in the child and dependent care tax credit that was eliminated in 2012.
According to budget experts, the changes will generate $591 million in the fiscal year that begins July 1 and $633 million in the following fiscal year for a grand total of a little more than $1.2 billion. Opinions differ widely on how much of an impact that will have on the Kansas economy and on state government.
Responding to the override Wednesday morning, Brownback refused to answer questions from reporters. But in a long, almost stream-of-consciousness statement, he claimed the tax cuts had been a boost to the economy, while simultaneously arguing that the state's financial problems are the result of a weak economy being dragged down by low agricultural and energy commodity prices.
Nevertheless, he left no doubt that he thinks the Legislature made the wrong decision, and said he thinks it was simply the result of a lengthy legislative session that has tried the patience of lawmakers.
"This isn’t the right way to go," Brownback said. "There was another way. And we kept working with people but that just wasn’t in the cards and was difficult to happen, and you get late in the session, and I think a number of people threw their hands up and said this is the only way to go."
"The unfortunate thing is that it’s a bad way to go, and we’re going to have long-term negative consequences for the economy of this state and for the people of Kansas going this route," he said.
Lawmakers from the Lawrence area, all of whom supported the veto override, gave quite a different assessment.
Sen. Tom Holland, D-Baldwin City, disputed the idea that the override was the result of lawmakers being tired and frustrated near the end of a long session.
"I think the elections in November were very critical for people letting their elected representatives know that they weren’t happy with the governor’s plans," he said immediately after the House's vote. "So here we are tonight. I think it’s a good win for Kansas citizens."
Rep. Barbara Ballard, D-Lawrence, said that without the tax bill, lawmakers would have had to make devastating cuts in funding for state services.
"It was looming heavy with Osawatomie (State Hospital)," she said, referring to the state psychiatric hospital that recently lost its certification to qualify for Medicare reimbursements. "Until we get those 60 beds certified again, it’s $1 million a month. And so we were worried about that."
Rep. Tom Sloan, R-Lawrence, acknowledged that as large as the tax increase is, it probably still isn't enough to pull the state out of the financial hole that has been dug since 2012.
"Long term, we cannot undo the damage of inadequate revenues," Sloan said. "And as was pointed out, we’re not fully funding the state retirement plan using these revenues, and we have to. That’s an obligation. So basically, this is a heck of a good start at undoing the damage that was caused by five or six years of failed tax policies."
And as for the future of Kansas politics, many observers said the veto override was a watershed moment that will define Brownback's political legacy because it represents a complete repudiation of the signature policy that Brownback himself had hoped would define him in history.
"I think when historians look back, Gov. Brownback talked about the lost decade, 2000-2010, when we had the double recessions and hits to our aerospace industry in Wichita," Holland said. "The years 2010-2020, in my mind, that’s going to be the lost decade for where we could have been had we not gone down this disastrous path to zero income taxes."
In any given year, no matter who the governor is, one of the basic questions lawmakers have to deal with is what the governor will accept. That's just as true for big issues like budgets and taxes as it is for relatively obscure issues like funding the state water plan.
Normally, legislative leaders deal with that by having regular talks with the governor, or meeting with his or her staff, and talking about the details of legislation. What does the governor want? What will he or she accept or not accept? What can the leaders pass through their respective chambers?
Throughout this session, though, members of both parties in both chambers have complained that they have found it increasingly difficult to do that with Gov. Sam Brownback. For some, the frustration started the opening week of the session when, after convincing lawmakers two years ago to repeal the school finance law that had been in place since the early 1990s and begin work on crafting a new one, Brownback offered no specific proposal of his own, saying that was a legislative responsibility.
And now with the specific news that he may, or may not, leave office soon to accept a job in Rome as the Trump administration's U.N. ambassador for agriculture and food agencies, one might think the problem might get even worse.
Surprisingly, though, members of both parties, and in both chambers, are saying it almost doesn't matter anymore where the governor goes because they're working on their own agendas, at their own schedules.
"I don't know that it's a big consideration to us at this point," said Senate Vice President Jeff Longbine, R-Emporia. "We know what we need to do. We need to come up with a structurally balanced budget and a tax plan that supports it. I don't know that we've worried at this point what the governor will sign or won't sign. I think we're trying to find consensus within our own body about what that budget and tax looks like, and we'll pass it out of here when we find it, regardless of who's in the governor's chair."
Brownback hasn't officially commented on the story, first reported Wednesday by Kansas Public Radio, which cited a single anonymous source. But he did nothing to dampen the speculation Thursday when, responding to questions from reporters, he declined to commit to staying in the governor's office through the end of the session.
The only statement from the governor's office concerning the possibility of his resigning came Wednesday from his spokeswoman, Melika Willoughby, who said, "Governor Brownback is focused on working with the Kansas legislature to balance the budget and pass a modern school funding system."
But Senate President Susan Wagle, R-Wichita, has said that's not what she has seen. As recently as Tuesday, just before the Senate shot down, by a vote of 1-37, Brownback's tax proposal for balancing the state budget, she accused Brownback of refusing to work with lawmakers.
"We met yesterday (Monday). We had a leadership meeting yesterday," she said. "We threw out some concepts and he wasn't very interested in budget stability and predictability, so this is where we start."
Asked in advance what she thought a negative vote would mean, she said: "For most legislators, all it's saying is the governor is refusing to acknowledge that we have a deep budget hole, and he's refusing to give us solutions. If anybody's playing games, it's the governor."
Sen. Laura Kelly, D-Topeka, the assistant minority leader in the Senate, agreed that the prospect of the governor leaving midsession is having little impact on the legislative process.
"We've been pretty much left on our own to deal with the taxes, to deal with the budget, to deal with school finance," she said. "His office has not been engaged at all, from what I can see, other than to wield his veto pen. So I think we'll just keep doing what we're doing and deal with whoever is in the governor's seat when the time comes."
Meanwhile on the House side, Rep. Tom Sloan, R-Lawrence, said he's been struggling to get Brownback's attention on a relatively mundane issue, but one that Brownback has said is a high priority: finding a way to fund a long-term plan to protect the state's dwindling water resources.
"I called the governor's staff this (Thursday) morning and said, you guys have not engaged," Sloan said. "The governor hasn't done anything. His agencies haven't come in and said, 'This is what we want.' They all supported the Blue Ribbon Task Force (which recommended earmarking about $50 million out of existing sales tax revenue for water projects). But they backed off because they knew that wasn't going to pass. But they're not offering anything else. They're not supporting anything else."
Sloan is one of the few Republicans willing to say out loud what many will say only privately, that he thinks it might be easier on the Legislature if Brownback does leave.
"If (Lt. Gov.) Jeff Colyer becomes governor, yes he has ties to the administration's policies, but he's not identified with most of them," Sloan said. "And so it may be easier for him to accept an income tax reform bill than it is for Governor Brownback."
One exception to that, Sloan acknowledged, is KanCare, the state's privatized Medicaid system, which is largely the product of Colyer's efforts.
"On most issues he is not (tied to Brownback's policies)," Sloan said. "On KanCare he certainly is and I would not expect him to support a Medicaid expansion bill. But he may have more flexibility on the income tax."
Sen. Kelly, however, said she thinks it's too early for lawmakers to start pondering whether Brownback or Colyer will be the governor by the end of the session.
"It depends, one, on if he gets the position, which he has not gotten yet, and, two, if he can move in before he's confirmed," she said. "If he has to wait until Senate confirmation, he could be here until December."
Following a near-meltdown in the Senate last week, Republican leaders in the Kansas House plan to move forward with their own plans for balancing this year's budget and raising taxes to balance the next two years' budgets.
On Thursday last week, the Senate abruptly called off debate on its own tax and spending plan after support for the spending cuts collapsed over the previous 24 hours. Among other things, that bill would have slashed $198 million in general fund spending out of the last four or five months of the fiscal year. The bulk of that, $129 million, would have come out of K-12 education.
The Senate tax plan, which was more or less paired with the spending cuts, would have raised about $660 million for the next two years by repealing the so-called LLC exemption that was part of the 2012 tax cuts that Gov. Sam Brownback championed, and by raising individual tax rates on everyone.
House Speaker Ron Ryckman Jr., R-Olathe, told reporters Friday that he planned to meet over the weekend with GOP leaders and other members to decide how they want to proceed on the budget and taxes.
On the table is a House tax bill that would raise just more than $1 billion in new revenue for the next two fiscal years by eliminating the LLC exemption, raising individual rates and reinstating a third tax bracket for individuals earning more than $50,000 a year, or couples filing jointly earning more than $100,000 a year.
The House hasn't yet produced a spending-cut bill — formally known as a "rescission" bill because it would rescind spending authority previously approved — but Ryckman said the Appropriations Committee planned to work on that Monday and Tuesday.
During an informal Q & A with reporters after the House adjourned Friday, Ryckman was asked where the line is, if there is one, between an acceptable and unacceptable cut to public schools.
"We’re still having talks and conversations about where that is," he said. "We’re trying to balance any decision with what it will look like to each individual district based on their individual data so there’s not disruption in services."
One interesting difference between the House and Senate approaches is how willing GOP leaders are in each chamber to work with Brownback.
When Brownback rolled out his plan in January — which called for delaying payments to public schools and KPERS, and borrowing $317 million from an idle funds investment account — Senate President Susan Wagle was quick to criticize it for relying too heavily on one-time money and failing to address the "structural deficit" in the state's budget: the gap between regular, recurring revenues coming in and regular recurring expenses being paid out.
Likewise, Brownback wasted little time lashing out at the Senate's tax plan, saying the higher rates would "punish the middle class," while repeal of the LLC exemption "needlessly harms the real people that serve as the lifeblood of Kansas."
Since then, some in the Senate have said leaders need to stop thinking about a plan that can get the minimum 21 votes needed for passage, but instead finding a plan that can get the 27 needed to override an almost certain governor's veto.
Ryckman, by contrast, said that probably is not a workable strategy in the 125-member House, where it takes 63 votes to pass a bill and 84 to override a veto.
"What we’ve talked about all session is, it’s not just about finding 63 (yes votes)," he said. "It’s also about finding something the governor will sign. This is part of the process.
"Anytime you’re talking about revenue enhancements, to get to 63 votes, it's very problematic. To get to 84, it’s almost impossible," Ryckman said.
Meanwhile in the Senate, GOP leaders have said they will not let any bills move forward until the chamber comes to a consensus about how to balance this year's budget and how to move forward on taxes. And as far as taxes are concerned, Wagle said, the only element that seems to have 21 votes so far is repeal of the LLC exemption, which would only raise about $230 million a year, far less than what's needed to close the projected $582 million budget gap for the next fiscal year that begins July 1.
Given that, she said, she has instructed the Ways and Means Committee to start putting together a budget for the next two fiscal years that would make enough cuts to close that gap.
Senate Democrats, on the other hand, have said they are working with a group of moderate Republicans on an alternative plan that could be discussed in committees sometime this week. Democrats say it would raise about $1.2 billion over the next two years through a combination of repealing the LLC exemption, raising rates, and establishing a third tax bracket that would kick in at $35,000 a year for individuals, or $70,000 a year for married couples filing jointly.
It's worth noting, though, that both the Senate Democrats' plan and the House proposal go much further in raising taxes than the original Senate plan that Brownback criticized so harshly when it first came out of committee.
Ryckman said he has been meeting with Brownback, most recently on Tuesday of last week, to discuss tax policy. So far, he said, the governor has not drawn any lines in the sand about what he absolutely will not accept.
"We're just talking about finding things we can agree on," Ryckman said.
Gov. Sam Brownbacks' office announced this week that he will deliver his State of the State address on Tuesday, Jan. 10, at 5 p.m.
If you think about that for a moment, you'll notice the time is when most TV and radio stations are carrying their evening news programs. And for people who work regular 9-5 jobs, it starts before they even get home.
But Brownback said that's not because he's trying to make it inconvenient for broadcasters. It's just that broadcasters have lost interest in carrying it.
"I think the only one that was carrying it was public television, and they decided last year they couldn't (carry it) at the later time, so we decided we'd want to make it as convenient for legislators as possible because they all have a lot of evening activities," Brownback said.
The State of the State address is traditionally one of the most important speeches any governor gives during the year. It marks the opening of a new legislative session, and an opportunity for the governor to lay out his or her legislative and budget priorities.
For many years, KPTS-TV, the public television station in Wichita, produced a show for the State of the State address that included live broadcast of the speech itself, and post-speech interviews with lawmakers and other people. Their video feed of the speech was also made available for free to commercial broadcasters, and the audio was available to any radio station that wanted it.
And it wasn't unusual on State-of-the-State night to see a line of satellite trucks from Kansas City, Wichita and Topeka TV stations parked on the Statehouse grounds, or on 10th Street south of the building, so they could take the video feed and relay it back to their stations.
Last year, though, KPTS cancelled its broadcast because it lost a major underwriter for the program. To fill in the gap, Kansas Public Radio, based at the University of Kansas, brought in equipment so it could carry the live audio, which it also made available to other broadcasters.
This year, though, even KPR is rethinking its strategy, mainly because the 5 p.m. start time conflicts with the highly popular NPR news program "All Things Considered."
KPR news director J. Schafer said Tuesday that the station still plans to carry the speech, but officials there haven't yet decided exactly how or when it will be broadcast.
One possibility, he said, would be to carry the speech live on its sister station, KPR-2, a separate programming stream designed for high-definition digital receivers, which very few people have. It is also available online. And in Lawrence, it's available over the air with a standard radio on KPR's new, additional station at 96.1 FM. It would then be rebroadcast on KPR's regular signal, 91.5 FM, at 6 p.m., after All Things Considered.
That would mean for the vast majority of people in Kansas, the only way to see or hear the speech live will be to find an online source that will be live-streaming the event.
The Journal-World hopes to provide a list of those live streams when it becomes available.
Gov. Sam Brownback on Monday refused to comment on speculation that he is being considered for a job in the new Trump administration.
"I'm not answering any questions on anything regarding me and the Trump administration," Brownback said Monday in brief remarks to reporters following the ceremonial lighting of the Statehouse Christmas tree.
Speculation that Brownback might leave the governor's office early was fueled Monday by the unexpected announcement that his press secretary Eileen Hawley will retire at the end of this week. But Hawley said Tuesday that her decision had nothing to do with the governor's future and that she has not even followed news about who is being considered for cabinet jobs.
Brownback served as the Kansas Agriculture Secretary from 1986 to 1990. He then left for two years to serve as a White House Fellow in 1990 and 1991 in President George H.W. Bush's administration, then returned to the state agriculture job where he stayed until 1993. He stepped down after a federal judge ruled the method used at that time to elect the secretary was unconstitutional and the Kansas Legislature passed a law giving the governor authority to appoint the state agriculture secretary.
Brownback did offer praise, however, for two other Kansans on President-elect Donald Trump's interview list: U.S. Rep. Mike Pompeo of Wichita, who has already been chosen for the job of CIA Director; and Secretary of State Kris Kobach, who is considered a candidate for Secretary of the Department of Homeland Security.
"Kris is a great guy and I wish him all the best," Brownback said. "That was a wonderful thing for Mike Pompeo and I think it's going to be a wonderful thing for the Trump administration."
If Pompeo is confirmed by the U.S. Senate, a special election will be called in the 4th District to elect a replacement. If Kobach leaves the Secretary of State's office, state law requires the governor to appoint a replacement.
Gov. Sam Brownback announced Monday that his press secretary, Eileen Hawley, will retire at the end of the week and that her assistant, Melika Willoughby, will take over the post.
Hawley took the job of press secretary in 2013. Before working for the Brownback administration, she worked in communications at NASA from 1992 to 2008, retiring as director of external communications for the Johnson Space Center in Houston. Her husband, former astronaut Steve Hawley, is a professor of astrophysics and director of engineering physics at the University of Kansas.
Hawley said she has no immediate plans to take another job but intends to continue working with the Astronaut Scholarship Foundation, which promotes science and technology education.
"I have had a wonderful time here, and I’m really grateful for the opportunity," Hawley said of her time in the governor's office.
Willoughby, who joined the communications office in 2014, is a graduate of Hillsdale College in Michigan. Willoughby is a graduate of the Dwight D. Eisenhower Women's Leadership Series and was recently named a Publius Fellow through the Claremont Institute: Recovering the American Idea.
During her two years in the governor's office, Willoughby has been the source of some strident comments, especially in email newsletters sent out to Brownback supporters. In 2015, she described the idea of expanding Medicaid under the Affordable Care Act as "morally reprehensible" because it "creates new entitlements for able-bodied adults without dependents, prioritizing those who choose not to work before intellectually, developmentally, and physically disabled, the frail and elderly, and those struggling with mental health issues."
On her Twitter profile, Willoughby describes herself as: "Redeemed sinner. Pursuing Jesus. Loving the orphan. American. Deputy Communications Director for @govsambrownback. @Hillsdale alumna."
"Melika brings a background in communications and political philosophy that enables her to serve well in this position," Brownback said in a statement announcing the change. "I appreciate her hard work and dedication to our great state."
News outlets in Kansas are not reporting the good news about the Kansas economy, and if they did, voters might feel differently about the impact that Gov. Sam Brownback’s tax policies have had on the state.
That’s the message that Brownback himself has been delivering lately, in talks to various groups around the state, including a recent get-together with the Kansas Press Association board of directors.
So when word of that conversation got back to the news desk, the Lawrence Journal-World asked to meet with the governor and let him make his case. Brownback agreed, and in the course of a 25-minute interview, he laid out his case — complete with a wealth of charts and graphs — with data that he says prove the Kansas economy is in better shape than people give it credit for.
“It just never gets out,” Brownback said at the outset. “That’s what I was complaining about, because we’ve got some really good employment numbers and small business growth numbers in the state, and that just never gets out.”
Much of that, he said, is directly due to the tax cuts he championed in 2012 and 2013. And in the areas where the state’s economy seems to be lagging, Brownback blames global, macroeconomic forces, such as commodity prices in the farm and energy sectors that are beyond the state’s control.
Brownback has good reason to try to shore up his case at this point. His allies in the Legislature who helped push through the tax cuts — at least those who actually ran for re-election — suffered badly in the Aug. 2 primary, and many people say there's a good chance they could suffer more defeats in the Nov. 8 general election.
If 2016 turns out to be a "wave" election, in which the balance of power in the Legislature completely shifts, then Brownback could be in for a tough ride in the last two years of his administration. And although there's every reason to believe that most voters who are motivated on the tax issue have already made up their minds, Brownback has an incentive for trying to make his case while he still has time.
The purpose of the tax cuts, Brownback reminds people, was to spur business development and increase private sector jobs over the long term. And by putting more money in the pockets of individuals, the theory was, that would generate economic activity that would produce revenue for the state from other sources, such as retail sales taxes, to offset the loss of income taxes.
“What that was built upon is, if you get a kind of normal economic situation, that as you cut income taxes, you’ll gain it back in sales,” Brownback said. “That was the theory. That was the experience in some other areas.”
Here are some of the numbers that Brownback cites to make his case.
The border wars. One of the boldest claims Brownback makes is also the most difficult to verify independently. That is the claim that Kansas tax policy has reversed the outflow of economic wealth from the Kansas side of the Kansas City metropolitan area to the Missouri side.
“We were losing tax filers to Missouri for 19 years in a row,” Brownback said. “That’s us losing wealth to Missouri. Enact the tax policy, and boom. We were having out-migration from Kansas the last three years prior. We now have in-migration, and a lot of that’s Missourians moving to Kansas.”
According to one of his charts, based on Internal Revenue Service data, in the three years just before the tax cuts were enacted, Kansans moving across the state line into Missouri were taking with them $150-$200 million a year in adjusted gross income.
But immediately after the tax cuts, in 2013 and 2014, the trend reversed, and now Missourians are moving back, bringing with them about $85 million worth of income.
According to Census Bureau data, however, there was no out-migration of people in the metro area from Kansas to Missouri.
Looking at migration data from 2009 through 2013 for Johnson, Wyandotte and Leavenworth counties on the Kansas side, and Jackson, Clay and Platte counties in Missouri, Kansas was a net winner in migration, gaining 2,396 more people from Missouri than Missouri picked up from Kansas.
“We are not saying we were losing residents to Missouri prior to the tax cuts,” Brownback’s spokeswoman said in an email. “We were gaining residents but that rate tripled following the implementation of the tax policy.”
“We had been losing wealth (and) money to Missouri, but not people,” she continued, “and now we are gaining people from Missouri and seeing wealth transfer in to Kansas as well.”
Business creation. According to data from the Kansas Department of Revenue, Brownback said, roughly 18,000 new businesses filed tax returns in the first two years of the tax plan, either under business names or Social Security numbers that had never shown up in state tax records before.
"And you've got 650 of those in Douglas County," he said pointedly.
Jeannine Koranda, spokeswoman for the Department of Revenue, said that was based on internal analysis of individual tax returns, which are not available to the general public, and no more detailed information about that analysis was available.
But even accepting that the numbers are accurate, the creation of those new businesses has not translated into large numbers of new jobs.
Numbers from the Bureau of Labor Statistics show that since the tax cuts took effect in January 2013, Kansas has added, on a seasonally adjusted basis, only 34,400 new private sector jobs, a growth rate of just 3.1 percent over three and a half years. That’s less than half of the national average of 8 percent growth in private sector employment over that same period.
“We’re a little flat,” Brownback said.
Nor would Brownback say that the job growth Kansas has seen is directly related to his tax policies.
“We don’t have the hard data that I know of to say that because of our business policy, we have this growth in private sector jobs,” he said. “But I do know we’ve hit near record on private sector employment. We’ve got record numbers of new small businesses formed.”
Furthermore, Brownback acknowledged, some new business entities are merely extensions of existing businesses, especially among real estate developers who commonly set up separate entities, known as limited liability corporations, or LLCs, for each individual development project.
But Brownback said even that represents economic growth.
"I’ve talked with developers, and one developer in particular in Douglas County," he said. "They form a new LLC to put the new building in. He’s out of Wichita, but he says, ‘Look, I’m using this to build buildings — the tax benefit of being able to put this, the revenue generated off of it.’ And he says we’re doing this in Lawrence. And you’ve got a lot of building going on."
Individual income tax collections. The tax cuts that Brownback championed came in two phases. In 2012, lawmakers passed a bill that slashed individual income tax rates overall and completely exempted income derived from certain kinds of business entities. The following year, lawmakers attempted to fix some technical problems in the original bill, but also passed a formula, which some called the "glide path to zero," that was meant to phase out income taxes altogether over a period of time.
In the first full fiscal year of the tax cuts, 2014, individual income tax receipts in Kansas fell 24 percent, to 2.2 billion. They bounced back slightly by 2.7 percent in fiscal year 2015, to nearly $2.3 billion, but fell again in the most recent fiscal year.
In the fiscal year that just ended June 30, Kansas collected about $2.25 billion in individual income taxes, still 23 percent less than the $2.9 billion collected in fiscal year 2013, before the full impact of the tax cuts took effect.
According to the Legislature's nonpartisan Research Department, the full impact of the tax cuts is that Kansas is now collecting about $920 million less each year than it would have if lawmakers had made no changes to the tax code.
But so far in the new fiscal year, Brownback said, individual income tax receipts have started to recover. In the first quarter of the new fiscal year, receipts have grown by $25 million, or nearly 5 percent over the same period last year, and they've actually beaten the official estimates by nearly $1.7 million.
"My point is, when people criticize the tax policy, the places where we’re not getting the yield are corporate taxes, which we didn’t do anything to; sales taxes, which we actually raised; and personal income. That’s the one where we’re actually ahead of last year, and we’re ahead of the estimate. That’s the one we cut."
But if income tax receipts are rising, it does not appear that the personal income of Kansans overall is changing very much. According to data from the Bureau of Economic Analysis, growth in per-capita personal income in Kansas has not kept pace with the rest of the nation.
Sales tax receipts. One of the most disappointing revenue figures that have been reported since the tax cuts were enacted is the lackluster growth in retail sales. That was, after all, a built-in assumption about cutting income taxes — that it would put more money in people’s pockets and spur consumer spending.
In fiscal year 2014, the first full year after the tax cuts, retail sales tax collections actually declined 3.7 percent, to $$2.1 billion. That was also the year that the sales tax rate dropped slightly, the result of a previous tax plan enacted by former Gov. Mark Parkinson in 2010 that included a “temporary” increase in the wake of the Great Recession.
Since 2014, sales tax have grown slightly, but not nearly at the pace that budget analysts had expected. In the most recent fiscal year, sales taxes grew 6.2 percent over the previous year. Of that, however, 5.7 percent can be attributed to the 2015 Legislature raising the sales tax rate, leaving only half a percent attributable to increased consumer spending.
The rural economy. Brownback says that has begun to turn around in the new fiscal year, with sales tax receipts in the first quarter beating the same period last year, and exceeding current estimates. But he acknowledges that hasn’t been even throughout the state.
“The urban areas are working. The rural areas are not,” he said. “If you add up all the rurals, it does actually matter.”
The rural economy, Brownback said, has been beset by global economic factors that state government is unable to control.
“We cannot overcome a huge falloff in oil prices, or a huge falloff in cattle prices and wheat. … You go west of Salina, it’s basically the pits. You go into the oil areas and gas areas, really bad. And your ag area is not very good, but the urban, where you’ve got a more normal situation.
“We’re flowing against a bad commodity market for us that normally hammers Kansas pretty hard,” Brownback said. “Because once you drop in ag prices, they don’t buy farm equipment; then our farm equipment manufacturers cut back employment. Once you’re not drilling for oil, you don’t have those employment jobs.”
“The urban areas are working. The rural are not,” he said. “If you add up all the rurals, it does actually matter.”
But the Kansas economy has always been moved by global economic forces that are beyond state government’s ability to control. And some have suggested it was folly from the beginning to think that those forces could be overcome with changes in the state of Kansas income tax code.
“I disagree with that,” Brownback said. “I agree we can’t impact the price of oil or the price of cattle. That’s a global commodity market. But I do think you can impact people moving. I think you can impact the growth of business, or decline over time. And we’ve got the data to show that’s indeed the case.”