Kansas's Failed Experiment

Jiri Flogel / Shutterstock.com

Surviving a tough reelection race, as Sam Brownback did in Kansas last year, can often be a cleansing experience for a governor. It should certainly bring relief. After all, Brownback managed to earn a fresh nod of support from voters despite a messy first term marked by a fiscal embarrassment of his own making.

Yet three months later, the humbling in the heartland goes on, much to the frustration of a Republican governor and one-time presidential contender who hoped to make Kansas the national emblem of conservative governance. Brownback's hard-fought victory on election day won him another four years, but it did nothing to fix the problem that nearly cost him his job: the state's finances. Kansas's budget has for months resembled a wallet with a hole in it—every time the state's bookkeepers peek inside, they find less money than the government thought would be there. Just a few days after the November election, the Kansas budget office revealed that revenue projections were off by more than $200 million, bringing the budget gap facing Brownback to $600 million in all.

The yawning deficit is widely blamed on the deep income tax cuts that Brownback, along with a Republican legislature, enacted during his first two years in office. They not only slashed rates, but more importantly, they created a huge exemption for business owners who file their taxes as individuals. By Brownback's own description, the tax plan was a "real live experiment" in supply-side economics, with the idea being that lower taxes would spur investment, create jobs, and refill Kansas's coffers through faster growth. Yet even under the most charitable analysis, revenue has plummeted much faster than the economy has expanded.

Now, Kansas's red ink has left the governor red- faced. Brownback is asking Republican state lawmakers to slow the income tax cuts over the next few years, raise taxes on cigarettes and alcohol, overhaul school funding, and divert money from the state's highway fund in order to balance the budget. It's not as if he's abandoning his conservative economic philosophy—he still wants to replace the state's income tax entirely with consumption taxes over time. And like any politician on the ropes, he is preaching patience. "These things take time," he said last month. He also acknowledged the toll his stumbles have taken on his image. "We're in Lent season, so I'm giving up worldly things, like popularity," he joked to a small crowd. Brownback has blamed the budget shortfall in part on automatic increases in education spending (a subject of a long-running court dispute), and he's cited a recent uptick in job growth as evidence that the tax cuts, on the whole, are working. "Kansas is on the rise, and the state of our state is strong," the governor proclaimed in an annual budget address in January.

Yet Brownback's latest proposals represent at least a partial retreat, and it's unclear how many of them the legislature will approve. "He’s trying to figure out how to save face. I think that’s the bottom line," Rochelle Chronister, a former Republican state chairwoman, told me. Chronister has led the GOP opposition to Brownback's agenda through the group she founded, Traditional Republicans for Common Sense. A separate anti-Brownback effort led more than 100 current and former Kansas GOP officials to endorse Brownback's Democratic opponent, Paul Davis, in the 2014 election. Brownback won anyway, 50 to 46 percent. "He’s lived and died by this philosophy," Chronister said of the governor, "and it’s becoming more and more obvious that it is not going to be successful."

Lori McMillan, a law professor at Topeka's Washburn University specializing in taxation, said Brownback's latest proposals were "band-aids" and an example of a "reactionary, by-the-seat-of-your-pants fiscal policy." The original tax plan went awry, tax analysts said, not merely because it slashed rates but because it wasn't paired with deeper structural changes to the budget. The exemption for businesses wasn't tailored narrowly enough to encourage job creation, and so people rushed to take advantage of it without actually boosting employment. "They used a lot of adjectives I’m sure they now regret, like ‘immediate’ and ‘shot-in-the-arm’ and ‘adrenaline," said Joseph Henchman of the Tax Foundation. "Just cutting taxes, and so deeply, without really any plans for how the state will pay for the spending that it’s not cutting – that’s proven to be a big problem there."

***

The state's predicament has drawn its share of national attention, and not only because it offers up an impossible-to-resist headline (What is the matter with Kansas?). But given how neatly Brownback's tax experiment fits into the Democratic argument against conservative budgeting, it's surprising that it hasn't drawn more coverage. That's particularly unusual because, inside Kansas, some of the blame has gone to the Koch Brothers—the favorite bogeymen of Beltway Democrats. Koch Industries is based in Wichita, and the family was a big supporter of Brownback's original tax plan. "We’ve given tax exemptions to the Koch Brothers without necessarily any outcome," said McMillan, who criticized the loophole for business owners. "Have the Koch Brothers created any more jobs? Was it meant for multibillionaires? The idea is going to be no."

The relatively dim spotlight may have something to do with Brownback himself. During 16 years in the Senate, Brownback was known not for his economic policy but for the kind of staunch social conservatism that peaked in 2004.  His presidential campaign in 2008 drew little notice, and two years later, he easily won the governor's seat that had been held by Kathleen Sebelius before she became President Obama's secretary of health and human services.

Brownback's mellow personal style is most generously described as bland. He possesses neither the charismatic combativeness of Chris Christie nor the folksy humor of Mike Huckabee. And while his record as governor is as aggressively conservative as Scott Walker's in Wisconsin, Brownback passed his tax plan without the initial blowback that Walker faced from Democrats and unions in the deeply polarized Badger State. Aside from the explanation that he isn't running for president, Democratic officials in Washington say they haven't harped on Brownback only because they have so many other ripe targets among Republican governors, including Christie, Walker, Mike Pence in Indiana, Rick Scott in Florida, and Bobby Jindal in Louisiana. (Of course, that's another way of pointing out that Republicans control well over half of the nation's governorships, thanks to their recent electoral success.)

Another way to assess the impact of Kansas's conservative experiment, however, is to note the absence of copycats. “You haven’t seen any Republican governors follow in his footsteps," McMillan said. Indeed, as Politico noted earlier this year, conservatives in states like Ohio, Missouri, and Indiana view Kansas as a cautionary tale and have pulled back on their own plans for deep, immediate tax cuts. "We are not going to do what Kansas did," South Carolina Governor Nikki Haley, a Republican, said bluntly in January as she discussed her plans to phase in tax cuts over a decade.

It will be more interesting to see what role, if any, Kansas plays in the 2016 campaign. Brownback may not be running, but the Republican presidential nominee will be asking voters to deliver the same kind of one-party power that he used to effect such significant change in 2011 and 2012. And it wasn't limited to economic policy—just in the last week, Kansas has approved legislation allowing people to carry concealed weapons without a permit, and Brownback signed what is arguably the nation's most restrictive abortion law.

The crowded field of GOP contenders for the White House means that a wide range of fiscal plans will be proposed, some pie-in-the-sky and others more realistic. The debate often devolves into hypothetical arguments about exactly how many jobs a particular proposal will create, or how much money it will cost. Kansas, as Brownback once conceded, offers "a real, live experiment." Are any of the candidates interested in learning its lessons?

NEWSLETTER

Get daily news from Route Fifty

Top stories on how innovation is driving smarter government across the country.

FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

When you download a report, your information may be shared with the underwriters of that document.