Gov. Brownback Vetoes Legislature’s Tax Increase Fix for Kansas Budget and School Funding Crisis

Yikes!  Sam Brownback, the governor of Kansas, just vetoed a budget into which the Kansas legislature had inserted a two-year, billion dollar income tax increase, which legislators had proposed as the way to avert fiscal catastrophe. The school funding system had been found unconstitutional by the state’s supreme court and was saved last June only by a stop-gap remedy. And the state has been experiencing a fiscal emergency for years.

Governor Sam Brownback slashed the state income tax in 2012 and 2013 and made other changes to the tax code that have reduced the state’s revenue.  He predicted the state’s economy would grow (and produce more revenue) as a result of his tax reform, but growth has not happened as he predicted.  Every quarter, tax receipts have been coming in far under what was projected. The state has been enduring a budget crisis for several years.

Taxation at the state level is definitely a public education issue that has consequences for things like class size and student-to-counselor ratios. After all, public schools are always among the biggest lines in every state’s budget. Massive tax cutting always hurts public schools, and Kansas is a primary example. Last May the state’s supreme court threatened to block the opening of school in September of 2016 if the state didn’t do something about the funding. In June, the legislature convened a special session to come up with a stop-gap remedy and keep schools open. After the short-term remedy passed, John Hanna of the Associated Press explained: “Kansas is bracing for more contentious legal and political fights over education funding even after legislators approved a narrow, short-term fix to satisfy a court mandate and avoid a threatened shutdown of the state’s public schools. Having directed lawmakers to make education funding fairer to poor areas, the Kansas Supreme Court will next consider the larger issue of whether the state spends enough overall on its schools.”

In the November election, the voters of Kansas reelected four members of the state’s supreme court who had been targeted because these justices had found the school funding system unconstitutional. The public has also begun to respond by replacing the tax slashers in the legislature, but not fast enough. In November two dozen far-right, tax slashing legislators were thrown out by voters. This created a more moderate legislature. While the legislature that convened this January cannot be called “left,” it is at least more centrist than the one that helped Brownback get the state in terrible fiscal trouble.

Sadly, however, the voters didn’t replace quite enough legislators to save the state from fiscal catastrophe. Here is what happened earlier this week in Kansas, according to Max Ehrenfreund of the Washington Post:  “Kansas Gov. Sam Brownback’s ambitious tax overhaul—which slashed taxes for businesses and affluent households, leading to years of budget shortfalls—narrowly survived a mutiny Wednesday afternoon when about half of Republican lawmakers joined Democrats in an effort to overturn it.  Brownback, a Republican who once called his tax policy a ‘real-live experiment’ with conservative principles… vetoed a bill that would have repealed the most important provisions of his overhaul. While the House voted to override the veto earlier in the day, proponents of the bill came up three votes shy of the two-thirds majority needed in the Senate. Fifteen Republican senators voted to override the veto, while 16 voted to retain it.”

Alan Blinder of the NY Times explains further: “The Republican-dominated Kansas Legislature, confronted on Wednesday by both a budget crisis and a governor resolute on preserving his record on tax policy, handed a narrow victory to Gov. Sam Brownback, whose veto of a plan to raise more than $1 billion over two years barely survived an override attempt.”  Blinder adds that state officials project a budget shortfall of $346 million at the end of the fiscal year on June 30.

The Associated Press’s John Hanna reports: “The bill vetoed Wednesday morning would have raised more than $1 billion over two years by raising income tax rates and ending an exemption for more than 330,000 farmers and business owners… Ending the income tax exemption for farmers and business owners has broad, bipartisan support from lawmakers.”

Hanna explains that Brownback has not said he would impose further cuts on the state’s schools: “Yet Brownback’s own budget-balancing package is designed to avoid cuts in education funding and other programs. It relies heavily on internal government borrowing and other accounting moves, and he seeks to increase cigarette and liquor taxes and annual filing fees paid by for-profit businesses.”

We’ll have to watch how that goes. The problem with Brownback’s arithmetic has been that every quarter state revenues have kept on falling beneath Brownback’s projections.