TOPEKA, Kan. (AP) — The sudden end of Kansas’ aggressive income tax reductions serves as a cautionary tale for other GOP-dominated states about the pitfalls of moving too far too quickly, some Republicans said Wednesday.
Legislators on Tuesday night overrode Republican Gov. Sam Brownback’s veto of a bill that largely rolls back the income tax cuts he championed in recent years. They concluded the cash-strapped state needed the extra revenue to fix the budget and raise additional funds for public schools.
The conservative governor refused to take questions Wednesday from reporters after publicly decrying lawmakers’ votes the night before as harmful to the state’s economy.
Persistent budget woes that followed Kansas’ first round of massive income tax cuts in 2012 eroded Brownback’s support among voters and prompted near-constant criticism on the left. Even conservatives who still espouse lower income taxes cite problems with Kansas’ program.
“I know there will be people out there that want to use this as evidence that all tax cuts lead to the end of the world, when that’s obviously not the case,” said Joseph Henchman, a vice president at the Washington-based nonpartisan but conservative-leaning Tax Foundation. “Kansas did some unique things that, I think, caused the difficulties that they’ve had.”
The bill enacted over Brownback’s veto will raise an estimated $1.2 billion over two years. The measure is designed to cover projected budget shortfalls totaling $889 million through June 2019 while providing new dollars for public schools to comply with a state Supreme Court ruling in March that education funding is inadequate.
Income tax rates will rise, with a new top rate of 5.7 percent instead of the current 4.6 percent. The state is repealing a “march to zero” law mandating further cuts if revenues grow.
Gone, too, will be an exemption for more than 330,000 farmers and business owners. Brownback touted the provision — the only one of its kind in the nation, according to the Tax Foundation — as a small-business break.
Even before acknowledging his defeat on taxes, Brownback on Wednesday held a public ceremony — flanked by some of his most ardent supporters — to sign the latest in a long string of anti-abortion laws.
Many Kansas legislators expect Brownback to step down before his term ends in January 2019, possibly to accept a post in Donald Trump’s administration.
If that happens, it would sharply contrast with Iowa. Before GOP Gov. Terry Branstad resigned last month to become U.S. ambassador to China, that state’s Republican Legislature approved a raft of conservative legislation, including anti-union and anti-abortion measures.
“We’re going to have long-term negative consequences for the economy of this state, for the people of Kansas,” Brownback told reporters. “A lot of people made it about me, but it’s not about me.”
Brownback’s legislative allies argued that the state should do more to control spending. They took solace Wednesday in their belief that higher taxes will also frustrate voters enough to fuel a new rightward push to reverse elections last year that left the Legislature with more Democrats and moderate Republicans.
“I really believe they’ve just stepped into a black hole,” said Kansas state Sen. Rob Olson, a conservative Kansas City-area Republican.
Brownback touted cuts in 2012 and 2013 as a model for other states, particularly the then-unique exemption for farmers and business owners.
In Missouri, the Republican-led Legislature enacted income tax cuts in 2014 over a veto by then-Gov. Jay Nixon, a Democrat. But it will reduce tax rates more gradually, and only if revenues grow, in what sponsoring state Sen. Will Kraus called a “totally different” approach than Kansas’.
“Most budget people would have been able to look at the numbers and say, ‘This isn’t going to work,'” Kraus, a Kansas City-area Republican, said of the Kansas experiment.
Republican-led Oklahoma also cut income taxes in 2014 but this year canceled a further reduction to help close a budget shortfall.
“In both of our states, we’ve been highly influenced by conservative policy think-tanks that encouraged us to keep cutting tax revenues in order to show a dynamic effect in the growth of our economy,” said state Rep. Leslie Osborn, the Republican chairwoman of the Oklahoma House Appropriations Committee. “There’s a certain core level of services that your citizens expect.”
Income tax rates in Kansas won’t be as high as they were before the tax-cutting began, when the top rate was 6.45 percent. But there’s no question lawmakers left Brownback’s main political legacy in tatters.
“Raising taxes should never be a cause for celebration, but eventually we came to the conclusion that it had to be done to correct the fiscal imbalance in state government,” said Kansas House Majority Leader Don Hineman, a moderate Republican from western Kansas.
Associated Press writers David Lieb, in Jefferson City, Missouri, and Sean Murphy, in Oklahoma City, also contributed.
Follow John Hanna on Twitter at https://twitter.com/apjdhanna .