It’s been called the “nuclear option.”
Maybe that term’s not strong enough to describe the legislation just passed in Kansas.
If the $3.7 billion tax-cut legislation is signed into law by the governor, it certainly — not almost certainly, but certainly — will destroy Kansas as we know it. And Johnson County will not be immune to the radioactivity of this blast. That massive tax cut will result in a $2 billion hole in the state budget over the next five years.
I know. You’ve heard this all before. It was just a few weeks ago, I wrote about an impending bloodbath. But that was only a $1 billion hole in the budget. The latest legislation doubles that.
Sam Brownback, our ever cheerful pro-growth governor, must know that these cuts go too far, even for him. He has as much said so. But that does not mean he will not sign them into law. He has rationalized that Kansas will create so many new jobs, and the economy will grow so much, that the tax cuts will pay for themselves, with no pain.
How much growth do we need to pay for the astronomical cuts?
The Kansas Economic Progress Council has done some quick math. They have calculated that Kansas would need to produce a half million new jobs over the next five years to generate enough income and sales tax to cover the $2 billion hole. Therefore, Kansas jobs would have to grow 50 percent over the next six years.
The KEPC compared that to the most go-go state in America — Texas. Over the past decade, job growth there was up a total of nearly 15 percent.
Even if you fanatically believe in supply-side economics — that cuts in taxes pay for themselves by the growth those cuts generate — the scope of impending cuts must at least cause one to take a deep breath.
If we cannot grow our way out of the budget hole, guess what that leaves: Draconian cuts in expenses or new sources of revenue.
This is where the nuclear explosion will be felt right here.
Half the state’s budget goes to K-12 education. Unless the Legislature lifts the lid on local tax authority, which is highly unlikely, our schools are in for rough times, indeed. There is no way they can be immune to cuts of the magnitude required. But even if we were given total local authority to tax ourselves, we might have to tax ourselves massively to make up for anticipated shortfalls from the state.
If you have a child who will be or is attending a state university, you can prepare yourself for much higher tuition, as the state inevitably will be forced to cut back on funding for higher education. This isn’t something Brownback wants. It just will be inevitable.
The hundreds of millions of dollars earmarked for transportation projects, including the planned improvements at our Johnson County triangle at Interstate 35, Interstate 435 and Kansas 10 will be ditched. The entire transportation budget will be decimated. There will be no choice.
Cuts to local governments from the state are a virtual certainty. That will lead to higher local property taxes to make up the difference.
Funding for social services (the ones that always get cut) will be slashed.
And look for “tax loopholes” to be filled. The one Johnson Countians should fear the most is to allow sales taxes to be levied on services, such as accountants, lawyers and engineers. The western part of the state could care less about the Johnson County economy, based on the service industry, rather than agriculture or aircraft manufacturing.
This is just the tip of the iceberg.
A gaping hole of $2 billion is so gargantuan, it is almost incomprehensible. No one can even imagine the impact it would have on this state.
But the session is not over, and there may be a compromise budget yet.
Then, we can go back to a simple bloodbath, rather than the nuclear option.
| Special to The Star