In search of the whole truth

By Rod Haxton, editor

When it comes to getting an accurate picture of the tax policy in Kansas and its impact on our economy, the Brownback Administration wants to steer you in the right direction.

“Reality and experience,” claims Melika Willoughby, deputy communications director for Brownback, “tell us you won’t hear (the truth) from the local media.”

If she can’t be honest, at least credit Willoughby with being loyal.

What you’re hearing from the media, as well as economists, is that:

•With the exception of November, tax revenues in the state have fallen short of estimates every month since February 2015.

•9,400 private sector jobs were created in Kansas during 2015, well short of Brownback’s goal of 25,000 jobs.

•To meet short-term expenses, the Brownback administration has raided the Kansas Department of Transportation, recently issuing another $400 million in bonds. The first principal payment on this “loan” isn’t due until 2025.

Willoughby says she wants Kansans to be “equipped with the truth.” And who better to offer the truth than Art Laffer, a former economic advisor for President Reagan, and Heritage Foundation economist Stephen Moore who helped craft the trickle-down tax policy for Kansas?

The two co-authored an article in “Investor’s Business Daily” where they praise the tax plan they helped write. To cherry pick a couple of items from Laffer’s self-congratulatory opinion article:

•According to Laffer, if Brownback’s tax cuts had taken effect in 1992 rather than in 2012, Kansans today would have an additional $4 billion in annual adjusted gross income.

And if Babe Ruth hadn’t been traded to the Yankees, imagine how many more World Series banners would be hanging in Fenway Park.

If we’re going to jump in Mr. Peabody’s Wabac time machine with Laffer, it’s pretty disingenuous to look at only one small piece of the tax puzzle.

You can’t just imagine that there would be an additional $4 billion in disposable income without also wondering how this would have unfolded over a 20 year period. We’re still talking about trickle-down economic principles and if there are big economic winners as we’re seeing today with this policy, then there would also be 20 years worth of losers.

To what degree would social services, programs for the poor, children’s programs and our public schools be underfunded?

The AGI has undoubtedly increased for the corporations and wealthiest individuals who benefitted most from the tax policy passed in 2012. So why are we facing a projected $436 million shortfall in the budget year that begins July 1?

Oh, that’s right, it’s because Kansas is the victim of plummeting oil/gas prices, agricultural commodity prices, etc. You know . . . things that never occurred between 1992 and 2002 and which are apparently unique to Kansas and none of our neighbors.

Besides, the people with this $4 billion in extra income annually would be using that money to prop up the local economy, increase sales tax revenue, create jobs . . . all the things that are supposed to be happening now, but aren’t.

•Laffer also complains that from 2003-12 the legislature suspended its requirement to maintain a 7.5 percent ending balance in the budget each year. But that same courtesy wasn’t extended to Brownback in 2013 or 2014.

 

The higher required ending balances have taken away “some $200 (million) to $500 million in funds” that could have been used elsewhere, according to Laffer.

In other words, who needs savings?

The state’s budget wouldn’t look near as dire if we didn’t have these economic woosies whining about a rainy day fund.

That’s why Brownback and conservative lawmakers are critical of school districts who maintain reserves to protect themselves (god forbid) from the prospect of the state not having enough money to fulfill its commitment to education funding.

•And Laffer claims that the state’s budget crisis has created a Chicken Little mentality with “warnings of school closures, fears of lessened police protection and (a) threatened lack of funds for the needy.”

Let’s see . . . a House bill would eliminate 154 school districts in the state (to save a reported $17 million annually), the Kansas Highway Patrol has about 100 few troopers than is considered essential for “full staffing,” Kansans are being pushed off public assistance rolls and it’s been years since state employees have received pay raises.

Those aren’t the imagined consequences of Chicken Little newspaper editors across the state. This is the truth as it’s being experienced by Kansans every day.

Laffer’s idea of the “truth” is to travel back in time with Mr. Peabody and create “what if” fantasies.

Willoughby’s “truth” is taken from a small slice of statistical data and using that to paint a broad picture of economic prosperity that supposedly touches everyone. If we in the media don’t share this utopian tax world then it’s because we prefer to keep the public in the dark.

Kansas newspapers aren’t hiding the facts, Melika, we are revealing them. You claim to want citizens who are both “enlightened and engaged.” So do we.

The difference is that we want them enlightened with the whole truth.

Rod Haxton can be reached at editor@screcord.com

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