House members, a good number elected two months ago on promise of taking immediate steps to deal with current and ongoing budget shortfalls, got with it surprisingly quickly on Monday.
Legislation proposed would repeal personal income tax exemptions for 330,000 farmers and business owners. If the measure flew through the two chambers, and Gov. Sam Brownback passed it into law, the repeal could generate about $260 million in revenue if made retroactive to Jan. 1.
All that sounds well and good, but don’t bet the farm on it occurring.
House leaders likely can muster enough votes in a coalition of Democrats and moderate Republicans for passage, and perhaps find enough conservatives to make the measure veto-proof. The Senate is another matter. Passage may occur, but finding 27 senators willing to buck Brownback will be an immense chore.
The alternative, unless something drastic such as selling off tobacco settlement proceeds meant to fund children’s programs occurs, is cuts to education, social and safety net programs, law enforcement and highways, through yet another sweep of KDOT’s reserves — what little remains.
The current fiscal year today projects a $342 million deficit; through 2019, with nothing done, the shortage would grow to better than $1 billion to fill funding gaps for existing programs.
Something must be done before June 30. The cash-basis law requires by force of law the state balance its budget.
OVER THE years we have found Gov. Brownback to be a hospitable and decent person, but for some reason only he can illuminate, the governor has locked himself into economist Arthur Laffer’s supply-side economics.
The theory is that if job producers — business owners, including farmers, and specifically those at the top of the income heap — are given financial opportunity, they will create jobs.
Rather than pocket money saved through advantageous income tax laws, they will expand business and industry, requiring additional workers. Those workers, the theory goes, will make up and add to income tax revenue deferred with what they pay in state income taxes.
The postulation is fetching, but doomed. From time immemorial, the theory has failed.
With every hope of avoiding cynicism, we have doubts if the concept would work with the possible exception of post-World War II’s economic revival — those halcyon days of the 1950s when Ike played golf and the country’s economic engines hummed along.
Even then, not all was right with the world. The Cold War intervened and many overseeing industrial and business growth discovered they could become filthy rich on the backs of workers, men delighted to have a “good-paying” job after suffering through the 1930s and the war and women happy to dash through the door Rosie the Riveter opened to them.
In a perfect world, Laffer’s theory might work. The world never has been perfect.
— Bob Johnson
