MANHATTAN, Kan. - The conservatives in the Kansas Legislature are going to face a new kid on the playground this year. Kansans for Quality Communities has come out to play and they intend to change who gets to play on the swing set.
Bringing together organizations representing education, health care, the disabled and state workers, Kansas for Quality Communities will provide a united front in reforming tax policy that has been inspired by the now discredited "starve the beast" mentality of the conservatives.
Following the passage of California's Proposition 13 in 1978 and the Reagan victory, conservatives sought to undo the policies begun by Franklin Roosevelt and the economic benefits those policies had brought to the working class by dismantling the social safety net provided by federal and state government bureaucracies. Thus government became the "beast" to be starved in order to reduce government to reflect the ideology of free-market capitalism.
Paul Krugman (2005) makes the following observation:
Since the 1970's, conservatives have used two theories to justify cutting taxes. One theory, supply-side economics, has always been hokum for the yokels. Conservative insiders adopted the supply-siders as mascots because they were useful to the cause, but never took them seriously. The insiders' theory - what we might call the true tax-cut theory - was memorably described by David Stockman, Ronald Reagan's budget director, as "starving the beast." Proponents of this theory argue that conservatives should seek tax cuts ... because ... budget deficits will lead to spending cuts that will eventually achieve their true aim: shrinking the government's role back to what it was under Calvin Coolidge.
The failure of such policies is now more than evident. Look at the situation California is in. The seventh largest economy in the world cannot balance their budget and are issuing IOUs to pay for goods the government needs.
But other empirical evidence shows that cutting taxes actually results in higher speeding and greater defects.
An October 2007 study by Christina D. Romer and David H. Romer of the National Bureau of Economic Research found: "...no support for the hypothesis that tax cuts restrain government spending; indeed, [the findings] suggest that tax cuts may actually increase spending. The results also indicate that the main effect of tax cuts on the government budget is to induce subsequent legislated tax increases."
Analysis of "starving the beast" over the past 49 years shows that all the tax cuts have done is cause a bloated federal deficit. These two graphs from the Congressional Budget Office demonstrate what happened to the federal budget when conservatives implement their economic policies of tax cuts and reduced tax rates on the riches taxpayers.
Once again Paul Krugman :
In other words, the starve-the-beast theory - like missile defense - has been tested under the most favorable possible circumstances, and failed. So there is no longer any coherent justification for further tax cuts. Yet the cuts go on. In fact, even as Congressional leaders struggled to pass a tiny package of mean-spirited spending cuts, they pushed forward with a much larger package of tax cuts. The benefits of those cuts, as always, will go disproportionately to the wealthy.
However many conservative Kansas legislators haven't heard this news and continue in their efforts to destroy the common good and place the future of Kansas' children at risk for their selfish ideology. Kansans for Quality Communities hope to change this.
Saying that "when one is in a hole, one is advised to stop digging," Kansans for Quality Communities calls on the legislature stop any more tax cuts, to bring tax exemptions under control, decoupling from the federal tax codes where that code forces additional cuts to state revenue, and rescind economic development initiatives that don't work.
During the past 15 years, the Kansas legislature has cut a cumulative total of more than $10 billion in tax revenues from the coffers of the state. Given that the legislature is facing a projected budget shortfall approaching $400 million. Rolling back some of its giveaways would make sense.
In order to meet current shortfalls the state closed 3 minimum-security prison units, cut back on highway maintenance, and 3,700 fewer teachers and staff went to work in Kansas schools in August as compared to a year ago. Then in November a 10 percent reduction was imposed on what Kansas pays doctors for services under Medicaid and the state has stopped paying for dental care for some seniors.
The Government Relations office at KU cites some encouraging public opinion polling that nearly half of Kansas voters surveyed indicated support for an increase in the state's sales tax. A one-cent increase would generate an estimated $350 million in yearly revenues for the state.
Stating that "more cuts are unsustainable," Kansans for Quality Communities say "the budget cuts enacted during and after the 2009 legislative session have been devastating." Further cuts will endanger the quality of life Kansans are used to and cost other Kansans their jobs, income, and homes.
The following organizations are members of the coalition: Association of Community Mental Health Centers of Kansas; Disability Rights Center of Kansas; InterHab Resources Network for Kansans with Disabilities; Kansas Area Agencies on Aging Association; Kansas Association of Public employees; Kansas Association of School Boards; Kansas Families for Education; Kansas health Care Association; Kansas national Education Association; Kansas Organization of State Employees; Statewide Independent Living Council of Kansas; and, the United School Administrators of Kansas.
To read the complete press release issue of Friday, 8 January by the Coalition, click here.
Main contact for the Coalition is Mark Desetti, at the KNEA. Tel. 785-232-8271.
Thanks for the post Chris! It is pleasing to learn of the formation of a broad based coalition to address the budgetary needs of the state. However, I would disagree with the Coalition's idea for increasing the sales tax. As I'm sure you're aware, sales taxes are inherently regressive. Additionally, some counties and municipalities in Kansas already have added onto the general sales tax rate (in Emporia it's 7.8%). Instead, a better approach would be to seek to phase out various sales tax exemptions or to institute other taxes to broaden the tax base (the lack of which is a primary reason state finances are in negative territory.