Thursday, May 19, 2016

It’s The Economy (In Kansas), Stupid!

Governor Sam Brownback of Kansas
As we sit on the verge of another Presidential campaign, the fundamental consideration before Americans is how it will affect the state of the U.S. economy and consequently our daily lives.

Many pundits (most notably those of the Conservative persuasion) frequently point out that the individual states are a laboratory for policy prescriptions before they are adopted on a national level.

With that in mind, it is an object lesson in policy to look at the experience of the state of Kansas. Since the election of a conservative legislative majority and a staunch conservative governor, Sam Brownback, in 2010, it has adopted a full blown commitment to the principles of supply-side economics. 

He'd been elected in the tea party wave of 2010 and, with the enthusiastic backing of Republican legislative majorities, launched a "pro-growth tax policy" of dramatic cuts for business and high-earning individuals in 2012 that he promised would be a "shot of adrenaline into the heart of the Kansas economy" that would create thousands of jobs and boost funding for schools and local governments.

A field test, in other words, of the supply-side theory that the best way to raise more tax revenue is to cut taxes and jolt the economy into overdrive.

It was not going well. In May 2014, it was reported that job growth in Kansas was sluggish, revenue was falling short of projections, public education funding and support for needy families was being cut and the state's bond rating was falling.

A Kansas City Star editorial noted: "The governor's economic plan is not helping Kansas keep up with most of its neighbors, much less pull ahead of them."

And a number-crunching analysis from the Center on Budget and Policy Priorities: "Kansas is a cautionary tale, not a model."

Brownback's defenders counseled patience. Give the magic beans time to grow.

Voters went along. Despite the high-profile defection of about 100 state Republican officials who were so alarmed by the trend lines that they announced support for Brownback's Democratic opponent in November 2014, Brownback narrowly won re-election. His experiment continued.

How's it going? Well, his tanking popularity numbers are a good clue. But also consider:

The Congressional Joint Economic Committee reported earlier this year that Kansas had just 9,400 new private-sector jobs in 2015 (out of 2.6 million nationwide). U.S. Department of Commerce data show that, prior to Brownback's tax cuts, Kansas ranked 12th in the nation in personal income growth; after the tax cuts it fell to 41st.

A handful of school districts in the state had to close early last year for lack of funds, and the state Supreme Court has had to issue orders requiring Kansas to cough up enough money to pay for K-12 education.

In March, Brownback cut $17 million in funding, 3 percent, from the state's six public universities in response to revenue shortfalls. In April, he announced that he was going to have to delay a $93 million contribution to the state pension fund, prompting Moody's Investors Services to downgrade Kansas' outlook from stable to negative.

On May 11, the nonpartisan Kansas Center for Economic Growth posted an analysis that concluded "Neighboring states have had more income tax revenue to make the public investment that improves quality of life. They've been able to support schools, safe communities, health care, roads and other essentials. Kansas, meanwhile, is seeing income tax revenue 11.6 percent below before the tax cuts were enacted. ... Whether looking at private-sector job growth or all job growth, Kansas is getting beat."

On Monday Brownback signed legislation to further restrict welfare and Medicaid benefits.

"Kansas isn't headed in the right direction," said a recent editorial in the Topeka Capital-Journal, a newspaper that endorsed Brownback for re-election in 2014. "A massive decline in revenue makes it impossible to compose a stable budget. … The state highway system has been robbed of funds to fix shortfalls. ... Those who believe people with mental illnesses or physical disabilities deserve compassionate help are appalled by limitations imposed on services."

Brownback's "vision for fiscal policy has been devastating," the editorial said. "As revenue shortfalls persist, and the outlook for the state grows bleaker, Brownback and his staff usually find someone, or something, to blame. … The excuses, however, grow old."

Time, luckily for Kansas, is running out.

State term-limit laws forbid Brownback from running for re-election in 2018. 

It’s time to consider if this is an experiment we want to allow Republicans to adopt on a national level.

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