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.”
Gov. Sam Brownback and the Kansas Legislature have lower approval ratings in Kansas than President Barack Obama, according to a recent poll from Fort Hays State University.
In fact, of all the public institutions and elected officials asked about in the poll, the one with the highest approval rating was one that Brownback and lawmakers spend a great deal of time attacking: the Kansas Supreme Court.
That may not be saying much, given that only 45 percent of those surveyed said they were satisfied with the Supreme Court. But at least it was higher than the 25 percent approval rating for the Legislature, or Brownback's 21 percent rating.
By comparison, in the solidly Republican state of Kansas, 34 percent said they were either somewhat or very satisfied with President Obama.
That may be of interest to Republican presidential candidate Marco Rubio, who has been touting endorsements from Brownback and other GOP officeholders in the state leading up to Saturday's Republican caucuses.
Those were just some of the findings in the survey by FHSU's Docking Institute of Public Affairs leading up to Saturday's Republican and Democratic presidential caucuses in Kansas.
In addition, in the survey of voters' presidential favorites, which was released last week, the Docking Institute asked about a wide range of political and social issues. And, similar to the Kansas Speaks survey from last fall, it showed most Kansans are much more moderate in political ideology than their elected leaders.
The survey sampled 440 Kansas adults, with a margin of error of plus or minus 5 percentage points.
Among the issues specific to Kansas:
• 77 percent said funding for public schools in Kansas generally should increase, and 63 percent want increased funding for their own local schools.
• Two-thirds (66 percent) oppose the Legislature's decision to allow concealed carry of handguns without a permit or training requirements. Nearly half (49 percent) said they strongly oppose that decision.
• Only 23 percent said they are "extremely" or "very" concerned that a terrorist attack will occur in Kansas, while 49 percent said they are "somewhat" concerned, and 28 percent said they are not concerned at all.
However, when it comes to allowing Middle Eastern refugees fleeing war and persecution to come to Kansas, the poll showed Kansans' attitudes line up pretty well with their elected leaders: 51 percent oppose such a policy, while only 36 percent support it.
The survey also asked about several national political issues. And again, it showed most Kansans to be more moderate, or even liberal, than their elected Republican leaders.
• Nearly two-thirds (61 percent) said taxes should be raised on the nation's top income earners, and more than half (57 percent) said large corporations should pay more in taxes.
• Concern about the federal budget deficit was split about evenly, with one-third saying they are "extremely" or "very" concerned about it; another third saying they're "somewhat" concerned; and about a third saying they're not concerned at all.
• More than half (53 percent) said they would support allowing a pathway to citizenship for illegal or undocumented immigrants who have no criminal record. But a sizable number, 23 percent, support deporting all undocumented immigrants.
• And nearly half (48 percent) said they oppose defunding Planned Parenthood, while only 35 percent support it. The other 18 percent had no opinion either way.
The question is often asked how the political views of elected officials be so different from those of the people they represent.
The answer appears to be simple. "Average" Kansans don't vote in primary elections where candidates are selected. Only the most passionate and partisan voters do.
For the first time in many years, the Kansas governor's State of the State address won't be broadcast live on television. At least that's how things stand now.
Dave McClintock, interim CEO of KPTS-TV, the public television station in Wichita, said the station was unable to raise the money to cover the cost of the broadcast this year and therefore decided to cancel it. KPTS has carried the State of the State address for the last several years and has shared both the video and audio feeds with other stations that wanted to carry it.
This year, however, it's doubtful that many commercial stations would carry it anyway because Gov. Sam Brownback has scheduled the Jan. 12 speech at 5:30 p.m., bumping up against the national network news programs.
Also, President Barack Obama is scheduled to deliver his final State of the Union address at 8 p.m. that same night.
Eileen Hawley, Brownback's press secretary, said the state of Kansas will live-stream a video feed of the speech through its website, Kansas.gov. She also said the administration is working with media outlets to ensure that all Kansans are able to watch and listen to the address.
J. Schafer, news director at Kansas Public Radio in Lawrence, said KPR will carry the audio portion of the speech live, and will make that signal available to other public radio stations in Kansas City, Wichita, Pittsburg, Hutchinson and Garden City by way of an NPR satellite, but that satellite signal is unavailable to non-NPR affiliates.
McClintock said he regretted that KPTS is unable to carry the speech this year.
"Hopefully we’ll not be in that position next year," he said.
Note: This story has been updated from an earlier version to reflect that the state of Kansas will live-stream the speech on its website.
A new poll from the Docking Institute of Public Affairs at Fort Hays State University shows only 18 percent of Kansans are satisfied with Gov. Sam Brownback's performance in office, and most (61 percent) think his signature tax policies have either been a "failure" or a "tremendous failure."
The Fall 2015 "Kansas Speaks" survey also showed a large majority (61 percent) favor expanding Medicaid. Another 84 percent oppose requiring colleges and universities to allow firearms on campus, and 82 percent are skeptical that voter fraud is a significant problem in Kansas.
The survey of 638 Kansas adults was conducted Sept. 14 through Oct. 5, with a margin of error of 3.9 percent.
The survey asked respondents to indicate whether they were very satisfied, somewhat satisfied, neutral, somewhat dissatisfied or very dissatisfied with a list of elected officials. Overall, only 18 percent said they were either somewhat or very satisfied with Brownback.
That question is slightly different from the standard polling question, which asks people whether they "approve" or "disapprove" of a person's performance in office. It wasn't immediately clear how much impact that subtle difference in wording may have had on the results. One thing that was clear, though: Brownback's "satisfaction rating" among Kansans was 10 points lower than President Barack Obama's.
Like a similar poll conducted this spring, the fall poll portrays a much more moderate adult population than is reflected in the Legislature. That's likely due to the fact that the Fort Hays State poll surveys "adults," as opposed to "registered voters," or even "likely voters."
But the high level of dissatisfaction with Brownback and his policies may be important for Republican candidates running in the 2016 elections. They will likely have to ask themselves how closely they want to be identified with a governor who is personally unpopular, and who cannot run again himself because he is term limited.
Not surprisingly, the poll showed a wide partisan divide on most questions. But when it came to assessing Brownback, even among those who identified themselves as "strong Republicans," 45 percent said they were either somewhat or very dissatisfied with his performance. Only 9 percent said they were very satisfied.
Thirty-eight percent of "strong Republicans" said they believe his tax policies have failed to stimulate economic growth.
Democrats file to challenge conservative senators
More than a year out from the 2016 elections, Democrats are lining up a fair number of candidates to challenge conservative Republicans in the Kansas Senate.
The latest to file is Vicki Hiatt, a Johnson County Democrat who filed Friday to run in the 10th District against incumbent Republican Sen. Mary Pilcher-Cook. Hiatt is a retired special education teacher who ran unsuccessfully for the Kansas House in 2014 against incumbent Republican Charles Macheers.
Earlier, Wichita school board member Lynn Rogers filed to challenge Republican Sen. Michael O'Donnell, a conservative who came into office in 2012 as part of the Kansas Chamber-backed slate of candidates who ousted incumbent moderates and took control of the Senate.
O'Donnell defeated then-Republican Sen. Jean Schodorf, a moderate whom the Democrats had never seriously tried to challenge. As a result, when O'Donnell won the GOP primary, he didn't have much difficulty winning the general election too.
But the district itself leans Democratic. As the Wichita Eagle has noted, it overlaps with three Democratic House districts, and voters there supported Democrat Paul Davis by double digits over Brownback in the 2014 gubernatorial race.
Democrats also have a candidate, Michael Czerniewski, teed up to run against Sen. Greg Smith in the 21st District of Johnson County. But moderate and progressive groups are said to be pinning their hopes more on Dinah Sykes, a former PTA president whose website features a picture of her in a bright red shirt, kind of a symbol of teachers unions and other pro-public education groups.
Reporters were also being told Friday to watch for another announcement in the 32nd District, where a high-profile Democrat is expected to announce against Sen. Steve Abrams of Arkansas City.
Democrats have been steadily losing Senate seats for the last 25 years. They're now at only eight seats in the 40-seat chamber, down from 13 after the 1992 elections. They haven't seen a net gain of Senate seats in any election since the 1980s.
For most of that time, though, they were able to form working alliances with moderate Republicans on issues such as K-12 and higher education spending, as well as abortion and other social issues. But that coalition was decimated after the 2012 elections when the Kansas Chamber and other groups allied with Gov. Sam Brownback took control by backing conservative Republicans to challenge sitting moderates.
Officials in Gov. Sam Brownback’s administration fired back Thursday at former Gov. Kathleen Sebelius over comments she made about Medicaid expansion, accusing Sebelius of having created the so-called “waiting lists” for elderly and disabled services in the first place. This all started a few days ago when Melika Willoughby, a young deputy communications director in Brownback’s office, sent out an email to political supporters, asserting that expanding Medicaid, as allowed under the Affordable Care Act, aaka “Obamacare,” would be “morally reprehensible” because it would prioritize able-bodied, childless adults over the frail elderly and disabled who are already on waiting lists to receive services. That led to Sebelius’ comment to the Journal-World Wednesday. Sebelius, one of the architects of Obamacare and the person largely responsible for implementing it during its first couple of years, called that statement “flat-out wrong” and said the only reason there are waiting lists is because the Brownback administration has underfunded the program. That, then, prompted Kansas Department for Aging and Disability Services spokeswoman Angela de Rocha to fire back late Thursday, calling Sebelius’ comments “wildly inaccurate.” “The Governor and the Legislature have made significant investments in increased funding to provide services to people with disabilities by investing in bringing people off waiting lists and into services, more than $65 million to date,” she said. In addition, she accused the Sebelius administration of creating the waiting lists in the first place when, in 2008 and 2009, in response to collapsing state revenues amid the global financial crisis, it implemented rule changes that reduced the number of people who received what are called “Home and Community Based Services.” This escalating war of words between the Republican and Democratic camps gives some indication of how heated this issue is likely to be in the next session, not to mention the 2016 elections. And so it merits some background and explanation.
First, what are the “waiting lists” for elderly and disabled services? Under Medicaid, low-income elderly and disabled individuals who can no longer take care of themselves are entitled to receive care in nursing homes. The problem is, that’s very expensive and, in many cases, unnecessary if the individual could only need a little help around the house. So in the 1990s, the states and the federal government started devising “waiver” programs to provide what are called “Home and Community Based Services,” or HCBS. It’s a waiver from the general rule that says the care has to be provided in a nursing home. Under the waiver, Medicaid will pay for medical care as well as certain nonmedical services such as house cleaning, home health aides, personal care, adult day health services, etc., so the individual can continue living at home. Kansas currently has six different types of HCBS waiver programs. They apply to the frail elderly; developmentally disabled; physically disabled; autism patients; traumatic brain injury patients; and those who need technology assistance. HCBS programs are cheaper for everyone because the government isn’t paying the cost of the physical plant of a nursing home. The individual lives in his or her own home. They’re also considered to be better, more humane forms of care because they leave individuals with a degree of independence and self-determination. The problem is, they’re not an entitlement the way nursing home care is. States have to budget for HCBS programs, and the federal government will kick in whatever its matching share is. (In Kansas, it’s about 55 percent of the total cost). But the number of people who get served is essentially capped by how much the state agrees to kick in. Since the inception of the program during Republican Gov. Bill Graves’ administration, the demand for HCBS programs has almost always outstripped the available funding. And, so, people are put on waiting lists.
How would expanding Medicaid affect the elderly and disabled who are on waiting lists? Sebelius’ argument is that it wouldn’t. They’re completely different programs. The frail elderly and disabled individuals who may qualify for HCBS plans are still entitled to medical care through nursing homes. And the state would still be in control over how much it spends for home and community-based care. The expansion of Medicaid to cover all individuals in households up to 138 percent of the poverty level is entirely separate. And, for the first three years, it would be 100 percent funded by the federal government. That gradually scales down to 90 percent in a few years, but Sebelius still calls it the most generous federal-state cost sharing program in U.S. history. Brownback, however, counters that as a practical matter, one does affect the other because the state has limited resources. Eventually, the state will have to pick up some share of the Medicaid expansion cost. And he says it’s unfair to add that cost onto the Medicaid system for able-bodied, working-age adults when the state is struggling to serve all of the elderly and disabled people who want HCBS plans. Sebelius’ counterargument to that is, it doesn’t have to be an either-or proposition. States can and — in her view, at least — should do both.
George Hansen, Gov. Sam Brownback's nominee for secretary of commerce, withdrew his name from consideration Tuesday, saying an extended family member has "extensive business dealings" with the agency.
A statement from Brownback's office gave no further details.
"I respect George's decision and have reluctantly accepted his request to withdraw his name," Brownback said. "I know him to be a man of integrity who would have served Kansas well."
Brownback announced his nomination Aug. 21, citing his "35 years of experience managing domestic and international businesses."
Most recently, he was president and CEO of the Enterprise Center of Johnson County, a venture development organization and early stage business incubator serving the Kansas City metropolitan area.
The Department of Commerce is the state's lead economic development agency. It has a budget of $113 million and administers the state's business, community and workforce development programs.
Hansen would have replaced Pat George, who retired as Commerce Secretary in July. His appointment was subject to Senate confirmation.
Republican Gov. Sam Brownback made an impassioned plea Thursday for House and Senate Republicans to reach agreement on a plan to balance the budget before his administration will be forced to take drastic actions.
Those range from vetoing the budget bill lawmakers have already passed, which would force at least a partial shutdown of state government starting July 1; using his line-item veto authority to strike $350 million to $400 million out of the budget; or signing the budget and waiting until July 1 to make allotment cuts to bring the budget into balance.
"We're at Thursday. By Monday you have to come up with something, or then I have to start executing one of these options I have in front of me," Brownback said during a rare joint caucus meeting of House and Senate Republicans. "So you don't have a whole ton of time here to negotiate through a bunch of different policy options in front of you."
The House and Senate so far have been unable to agree on a revenue package to raise the roughly $400 million needed to fund the budget. The House debated long into the night Wednesday, carrying over into Thursday morning, before defeating a Senate-passed plan.
Secretary of Administration Jim Clark said earlier in the meeting that his agency needs at least two weeks to re-program state computer systems with information based on the new budget.
Further, both he and Budget Director Shawn Sullivan warned that without a balanced budget in place, credit rating agencies will almost certainly downgrade the state's bond rating, which would likely raise interest rates on bonds the state plans to issue in the new fiscal year.
Those include $312 million for Regents universities, $750 million for the Kansas Department of Transportation and $1 billion in pension obligation bonds to shore up the troubled Kansas Public Employees Retirement System.
Brownback said he cannot issue line-item vetoes for anything in the K-12 education budget or the judiciary budget because those were passed and approved separately earlier in the session.
He said the amount of money he would need to cut would be roughly equal to the combined state funding for all six Regents universities.
House and Senate tax negotiators were scheduled to meet again at 7 p.m. One possibility being discussed is for the House to reconsider its action on the tax bill it defeated earlier in the day. But some lawmakers want the conference committee to submit a different plan, possibly including a tax on business income that is currently exempt from state taxes.
Despite the state's looming budget crisis, Gov. Sam Brownback gave an upbeat speech to the Kansas Bankers Association, saying the state is poised for economic growth, and vowing to continue on his course to eliminate state income taxes.
Speaking for about 20 minutes in a second-floor hallway at the Capitol, Brownback briefly noted that January revenues came in far below expectations, but focused only on the lag in sales tax collections, which he said was the result of a lackluster holiday shopping season that was felt nationwide.
But the $47.2 million revenue shortfall in January only added to an already dire budget situation. In November, state budget officials projected revenues would be $279 million short of what's needed to fund this year's budget. In response, Brownback ordered about $60 million in direct spending cuts in December and is now asking lawmakers to approve additional measures to close the remaining gap.
According to many analysts, the biggest contributor to the revenue shortfalls has been the sweeping income tax cuts enacted in 2012 and 2013. Supporters of those measures said they would spur rapid economic growth. And in his remarks to the bankers association, Brownback said he still believes in that theory.
"Because the pro-growth position in the United States is to be a right-to-work state with no income taxes," Brownback said.
He told the bankers that he "cannot find a single study" to support what has often been called a "three-legged stool" of taxation in Kansas, a balance between sales, property and income taxes. "But I can find a lot of studies that point to, if you get that income tax rate down to zero, these are, long term, the states that grow the fastest."
The most recent data from the U.S. Bureau of Economic Analysis, however, does not show a consistent pattern of above-average growth — as measured by their gross state products — in the seven states that have no income tax.
In 2013, when the U.S. economy grew at a sluggish rate of 1.8 percent, two of the seven no-income-tax states had even slower growth: Nevada at 1 percent and Alaska at -2.5 percent. Two other states that do not tax wages, but do tax interest and dividend income, also had below average growth: New Hampshire at 0.9 percent and Tennessee at 0.8 percent.
Most of the other no-income-tax states also had sluggish growth, although they were slightly above the national average: Florida at 2.2 percent and Washington at 2.7 percent. South Dakota and Texas saw growth rates in the 3-4 percent range.
Only Wyoming — whose entire population is roughly equal to that of Johnson County — stood out with a 7.6 percent growth rate, no doubt fueled by the new boom in domestic oil and gas production.
According to the website bankrate.com, which has information about the no-income-tax states, most of the states on the list have significantly higher state sales taxes than Kansas, or they have other significant sources of revenue such as the gaming industry in Nevada, or the petroleum industry, which funds nearly all of Alaska's state operations.
TOPEKA — House Minority Leader Paul Davis, D-Lawrence, on Friday gave a farewell speech to the chamber he has been working in for the past 12 years.
"Thank you for the friendships that I will cherish forever, for the memories that will never leave me, and the opportunity to simply serve," Davis said.
Davis is giving up his seat to run for governor against Republican Gov. Sam Brownback.
He told House members that next year he will be working in the governor's office or in his law office in Lawrence.
Davis said it has been an honor to serve the 46th House District. For the past six years, he has also been minority leader.
Davis thanked his wife, Stephanie, daughter, Caroline, and parents, who were all present, and each member of the Douglas County delegation, saying he learned from all of them.
He also thanked his staff and House Republican leaders.