We hate to say this, but we told you so.
A recent article in the Wichita Eagle entitled, “Kansas tax revenue needs to grow faster, budget director says” describes warnings from the state budget director that “Kansas needs to experience a higher rate of natural growth of tax collections than it has in the past few years to fully fund spending increases required by law.”
To the members of the Kansas Truth Caucus and others who argued against the tax-and-spend scheme adopted by the Kansas Legislature in 2017, this is no surprise. In fact, before the final budget vote was even taken it was known that the historic tax increase was not enough to cover the new spending included in the FY 2018 and FY 2019 budget. Simply put, the math never did add up.
The way out of a budget deficit has never been to increase spending. No matter how large of a tax increase you pass, if you simultaneously increase spending at nearly the same rate, the result brings you right back to where you started – in the red. The 2017 Legislature passed a $1.2 billion tax increase and then turned around and spent $1 billion in new and unnecessary spending.
Unfortunately, because the massive, retroactive tax increase on families and businesses undermines the natural economic growth required to produce an increase in revenue, the chances of the economy growing enough to counter the projected budget deficit is unlikely, outside of the national economy growing at such a rate it lifts Kansas in spite of ourselves.
The truth is that the real long-term solution to the Kansas budget picture was never increasing taxes on families and businesses, but through a combination of keeping spending in check and creating a tax and regulatory environment by which the economy could return to traditional levels of growth. The decisions of the 2017 Kansas Legislature took us in the exact opposite direction, and the consequences of those decisions are already coming to fruition.
Of course, Kansas families understand this. A family in debt does not get out of debt by increasing spending, even if that means making difficult choices. It is why surveys consistently showed that Kansans opposed tax increases on families and businesses and instead favored spending reductions or at most, a combination of the two.
The Kansas Truth Caucus recognized the need to hold the line on out-of-control spending and come up with a plan that could address the budget deficit and set the state back on a path to prosperity. That is why we offered the Republican Balanced Budget Solution, which simply held the line on spending and removed the need for a massive, retroactive tax increase. This common-sense proposal would have allowed us to get our fiscal house in order while not damaging our prospects of economic growth.
Unfortunately, rather than giving serious consideration to the Republican Balanced Budget Solution or working towards a compromise, the left-wing majority in the Kansas Legislature instead passed the largest tax increase and the largest budget in history, and the results speak for themselves – another budget crisis and even more tax increases are now on the horizon.
It’s a classic case of the cure being worse than the disease.