Sunday, September 21, 2014

Kansas in the red

6/11/2014

Lots of people are buzzing about headlines that appeared in newspapers across the state this past week. Finally, the worsening fiscal condition of the state seems to be getting widespread attention.

In a talk with the League of Women Voters, Duane Goossen, former state budget director, forecasted the state will be in the red in one year. The following day, Nick Jordan, Kansas revenue secretary, attacked Goossen’s credibility and denounced his revenue projections as untrue.

Lots of people are buzzing about headlines that appeared in newspapers across the state this past week. Finally, the worsening fiscal condition of the state seems to be getting widespread attention.

In a talk with the League of Women Voters, Duane Goossen, former state budget director, forecasted the state will be in the red in one year. The following day, Nick Jordan, Kansas revenue secretary, attacked Goossen’s credibility and denounced his revenue projections as untrue.

Goossen is one of the most credible people who has served our state. He worked as budget director under three governors — Democrat and Republican — and served 14 years in the Kansas House of Representatives as a Republican, mostly on the budget-writing committee. He served as one of the six revenue forecasters for 12 years. Goossen’s numbers and projections are consistently accurate and reliable.

Remember, state tax revenues fell $217 million short of projections in May. The drop in revenues for both April and May puts tax revenues $310 million below estimates for the fiscal year with only one month left. That is an undisputed fact.

But Jordan said it wasn’t the fault of Gov. Sam Brownback’s tax plan, but was because of changes in federal tax policy that caused many taxpayers to take capital gains the prior year. Jordan also quoted a Rockefeller Foundation study to support his position.

This claim didn’t hold up to scrutiny.

Several newspapers reported that an analyst with the Rockefeller Foundation said that Kansas leaders misrepresented her research on the cause of the state tax revenue drop and that Kansas could be forced to make cuts in the near future. “In Kansas it’s really not of that much importance,” the analyst said, referring to the capital gains tax changes in a phone call to a reporter at the Wichita Eagle.

So, why are Brownback revenue officials misleading the public? It boils down to the November election.

Brownback made his income tax reduction plan the centerpiece of his administration’s accomplishments — putting Kansas on a “glide path to zero” in order to grow the state. However, study after study shows that cutting taxes, especially the way it was done in Kansas, doesn’t produce economic growth. And the severity of the cuts is eating away at the things Kansans hold dear — good public schools, quality roads, and services for vulnerable populations. Without these, our quality of life suffers and growth will elude Kansas.

Goossen is right about the revenue forecasts leaving the Kansas budget in the red in a year.

The Rockefeller Foundation analyst is right about the cause of the downturn in revenues being attributable mostly to Brownback’s tax plan, not changes in federal tax policy.

Last year, the revenue department estimated the drop-off in revenues attributable to the treatment of capital gains was about $30 million, not $217 million. Even if no one reported capital gains for 2013, the fiscal note would only be about $100 million — not $217 million, the actual size of the shortfall.

In the eight years I served as secretary of revenue (2003-2010), I always gave straight-forward, honest answers. It is sad for me to see revenue officials misleading Kansans about the fiscal condition of the state in order to sway public opinion before the election.

Joan Wagnon,

Kansas Democratic Party chair,

Topeka

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