Dark forest view, Yosemite

Thursday, September 17, 2015

Trouble in the Sunflower State

For Kansas Governor Sam Brownback it was supply side gospel.

Institute large income tax cuts for individuals and corporations and people would be crawling all over each other for the chance to move to the prairie state and open new businesses.

In addition, Brownback created an exemption so that business owners could file returns as individuals.

This was all supposed to  cause a large increase in revenue, or that is the way his economist pal Arthur Laffer said that it would work out. Laffer designed and preached for these cuts in 2012. Brownback had so much faith in the theory that he never bothered to think about how to pay for things if things didn't work out exactly as planned.

It hasn't worked out so well. Kansas is now dreadfully short of revenue and its schools and roads are in shambles. There is talk of defunding higher education. Revenue decreased a further 3.8% this year. Kansas is facing a $800 million dollar budget deficit. Kansas is now raiding and diverting its Highway Fund to pay for its huge deficits. Jobs haven't followed, its 3.1% increase trailing its neighbors 4.6%. Unemployment is up and in fact, the Sunflower State lost 3800 jobs in May. Both Moody's and S&P have downgraded the state's bond rating. Schools have been forced to close early this year and to fire teachers.

In other words, the state is a total freaking mess. I only wish Jack Kemp was still around to see what his grand vision looks like when confronted by reality.

The governor and Laffer preach patience, these things take time. It should be noted that the Koch Brothers headquarters are in Wichita and they were probably pretty keen on the whole idea. Brownback responded to the problems by signing a pair of bills that raised $384 million in revenue by hiking the state’s sales tax and instituting a host of other levies, including one on cigarettes.
... when Republicans tried to close the budget gap this year, Brownback blamed Medicaid, education, and the state’s pension system as the drivers of the deficit, but there was little effort made to address them. “No one’s really looked at long-term reform yet. They throw up their hands and say, ‘We tried.’ No, they didn’t really try,” Upton said. “The governor needs to learn, and I think a lot of the people in the legislature needs to learn, when you cut taxes in the manner that they have, you need to also cut spending.”
Brownback is trying to deal with the schools fiasco by turning the problem inside out, institute merit pay for teachers as if this is a problem created by educators that aren't doing their job rather than looking in the mirror with his fellow legislators.

An interesting twist in the Kansas debacle is that Brownback is now threatening to defund the judiciary in his state for voting against him. In 2014 the state supreme court ruled that the disparity between school funding in rich and poor districts violated the state constitution. The justices ordered the legislature to fix the problem.

In reaction, the legislature passed an administrative law that stripped the supreme court of its authority to appoint local chief judges and set district court budgets. Brownback also threatened the judges with recall and retaliation.

On September 3rd of this year, Shawnee County District Judge Larry Hendricks declared unconstitutional a 2014 law changing how chief judges in the state’s 31 judicial districts are selected. Hendricks said the law interfered with the power granted by the state constitution to the Kansas Supreme Court to administer the courts. In short, the law was a gross violation of the concept of separation of powers.

Unfortunately no one knows if state funding for the judiciary through June, 2017 is now legally null and void? Proponents of the law are falling back on a familiar canard, the judge shifting merely a case for the concept of "local control."
“The Legislature has taken that power away from the Kansas Supreme Court and, thus, exerted itself over a fundamental component of the Judiciary.” Shawnee County District Judge Larry Hendricks
The Kansas Attorney General successfully received a stay on the Judge's ruling so that they can try to work it all out. In any case, the next time some conservative tries to dazzle you with a little supply side pixie dust, let them know that you have seen how the movie ends already, in the great Kansas experiment.

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