One of those not-well remembered provisions of the tax-cut bill that Gov. Sam Brownback outlined at his State of the State address in January was a provision that any new revenue into the State General Fund (SGF) above 2 percent growth be used to reduce taxes.
That was the dreaded-by-many “lid” on state government spending. Tax receipts increase by more than 2 percent? Use that overage to reduce taxes. It was seen—accurately—as a way to shrink the size of state government and that’s what Brownback’s supporters want.
Well, after a little clever, sharp-elbowed legislative maneuvering, he got what he wanted—only bullet-proofed.
While the State Senate was loading up a tax-cut bill earlier this session with showboat cuts designed to generate campaign fodder, it wound up passing a bill that was way too big—basically to get a bill to take into a House-Senate conference committee where it could be pared back to an affordable level.
Guess what? The House took that over-fed Senate bill and sent it to the governor. It is so big in tax cuts that projections are it will in the future nearly bankrupt the state, requiring sharp cuts in spending on virtually everything: Schools, social services, state government, higher education, nearly everything that we’ve gotten used to and expect state government to do for us.
Now here’s the good part for those who want government on a weight-loss program: Instead of just a little 2 percent growth cap that can be bypassed by the Legislature just as it has bypassed the 7.5 percent ending balance law for years, this can’t be bypassed. It reduces the amount of money coming into the state treasury from taxes, forcing cuts in state spending instead of the Legislature voluntarily cutting spending to save money. The money just won’t be there.
The shortfalls in future years under the bill now on Brownback’s desk—estimated at more than $2 billion—mean dramatic spending cuts. The SGF is about $6 billion and change, so in the out-years, the cuts in state spending are going to be massive.
But, if you want to shrink government, that’s the best way to accomplish it. Instead of just fiscally responsibly spending a little less, make sure you have a lot less money to spend. Not exactly the grown-up way to go about it, but it works.
How that plays out after the elections, well, that’s a problem.
It does mean, for example, if the governor’s Medicaid overhaul program doesn’t save the state $800 million over the next few years, or the Supreme Court demands lawmakers spend more money on K-12 education, or the economy sours, there will be tax increases in the next two years.
Hmmm…those tax increases would become necessary just about the time the House and—oh my!—Brownback would stand for reelection. That’s what a too-big tax cut bill could cause if lawmakers don’t agree on a smaller tax cut proposal this year.
But, tame the Senate bill this year and we’re imagining conservative challengers to moderate senators will rail against that on TV and radio and in enough mailings to potential voters to give postal carriers hernias.
Think this is interesting now? This is just the first limbo dance, before the pole gets lowered…
Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver’s Capitol Report—to learn more about this statewide political news service, visit the website at www.hawvernews.com.
Brownback’s tax plan means dramatic cuts