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Kansas experiment yields valuable lessons

Posted June 7th, 2017 to Blog

GUEST BLOG
By Heidi Holliday, Kansas Center for Economic Growth

You’re welcome, America.

Our state, Kansas, just wrapped up a five-year experiment in governance from which the other 49 states can now glean some important lessons. The Kansas Legislature has voted to roll back much of the 2012 package of tax cuts that sent the state into a downward spiral of financial instability and weakened the Kansas’ public schools, universities, Medicaid program, and virtually everything else that the state funds.

With the state facing yet another budget shortfall of $900 million, government leaders decided that enough was enough. Governor Brownback, who heralded the 2012 experiment, was proposing yet more temporary band-aid approaches and more cuts deal with the shortfalls. The Legislature chose a different path and instead sent the Governor a bill that would raise more than $1.2 billion in new revenue over two years by, among other things, repealing a costly tax break for pass-through income, rebalancing individual income tax rates by reinstating a third tax bracket, and reversing course on the Governor’s plan to eliminate our state income tax. Brownback vetoed the legislation but, with bipartisan support, the House and Senate quickly overrode the veto.

Our state has begun the path to fiscal stability and is closer to becoming a model of good policy choices as much as it is a cautionary tale. The damage done to Kansas from this reckless experiment will not be undone overnight, but other states need not wait to act upon the lessons learned.

Put simply, revenue matters. You can’t get something for nothing. We all want and deserve thriving communities with great schools, parks, and modern roads and bridges; and we chip in to pay for that. That’s what taxes are for.

Because of the scope of the 2012 changes, it didn’t take long before Kansans in every corner of the state began connecting the dots between the actions of state lawmakers and the quickly eroding quality of the things that make for a good economic foundation in every community. With every subsequent shortfall, the picture became more clear.

Meanwhile, the promised economic boom — and the revenue rebound that would supposedly follow — never happened (as economists predicted). In the last few election cycles, voters have viewed candidates and their promises through a different lens, and the 2017 Legislature had the experience and public backing to chart a new course.

Most state tax codes, including ours, need further reform, but it’s high time that state tax policy adhere to one basic, proven (and now proven once again) principle — states need revenue to invest in the things that create thriving communities and a prosperous economy. Kansas just learned this lesson again, the hard way, so that your state doesn’t have to.

You’re welcome.

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The Kansas Center for Economic Growth is part of the State Priorities Partnership (SPP), a nationwide network of policy analysis groups coordinated by the Center on Budget and Policy Priorities. The Iowa Fiscal Partnership — a joint initiative of the Iowa Policy Project and the Child & Family Policy Center — also is a member of SPP.


Ten years of balanced analysis

For 10 years, two organizations have stood together to help Iowans see the stakes for their families in good public policy.

110929-ifp-newlogo10Back then, these two nonpartisan, nonprofit organizations — the Iowa Policy Project (IPP) in Iowa City and the Child & Family Policy Center (CFPC) in Des Moines — merged their common state policy work under one banner, the Iowa Fiscal Partnership (IFP).

We focus on better informed and well-targeted state policies to provide adequate public services and better economic opportunity to more Iowans, particularly those at low incomes who have been pushed back, held down or shut out. IFP draws upon the expertise in various areas of policy work by IPP and CFPC. In short, it takes money — appropriately and equitably generated — to provide services necessary for the common good.

Success has many parents, but we can safely say that because of IFP:

  • Iowa’s Earned Income Tax Credit is twice as large as it was just a few short years ago, benefiting more families and boosting the economy.
  • There is new scrutiny on spending on tax subsidies for large corporations that pay little or no income tax in Iowa.
  • Iowa policymakers and advocates know more about who pays taxes in our state, and can identify exaggerated or false claims when they are made.
  • Work supports — such as child care assistance — are shown to make work pay for Iowa families, and to help the economy and family prosperity.

In our 10 years, a variety of circumstances shaped the political climate in which we work — governors of both parties, legislatures under divided leadership or full control of one political party. Serious attention to issues means not being distracted by who has or who does not have the reins of power. Our business is the arena of issues, not of party politics. In this, we are not alone.

Inside the state, good advocacy groups work tirelessly for Iowans’ best interests — on family budgets, on education, on health and nutrition, on child care, on clean air and water, and on safe neighborhoods. They want the independent analysis that sets our work apart, so they can make their case to their elected officials. Likewise, media quote our work for information and perspective — and the policymakers themselves use our reports in debate and decisionmaking.

sppartnershipIFP has been for these past 10 years a proud member of what has been known as the State Fiscal Analysis Initiative, which has grown to 41 states and this summer took on a new name: the State Priorities Partnership.

Our Iowa Fiscal Partnership is proud to be a part of this new national partnership of organizations focused on “the fight for a just and equitable America.” There is no better place to be.