By DAVE TRABERT
Kansas Policy Institute
It’s bad enough when politicians fabricate stories for political gain, but it’s especially appalling coming from a university professor. A recent column by Emporia State professor Michael Smith claimed that the Kansas Policy Institute budget plan for the state of Kansas used dynamic scoring to “…forecast revenues nearly $400 million higher in FY 2016 than do the state’s economists.” That is an absolute fairy tale.
KPI did not use dynamic scoring in our budget plan and the revenue estimates we use are the official estimates. Professor Smith is simply concocting the story to suit his political purpose. Our budget plan for Kansas uses official spending and revenue estimates as the starting point and suggests some legislative changes to increase revenue and reduce spending without impacting services.
Professor Smith also poses a false question: “Are we in a huge budget hole, created by the tax cuts championed by Governor Brownback? Or, will economic growth save the day?”
Tax revenue did decline but it is still running ahead of the ten-year inflation track. Even after allowing citizens to keep more of their hard-earned money, tax revenue for FY 2014 was 28% higher than in FY 2004; inflation over the period was 24%. And tax revenue is expected to stay ahead of inflation; official revenue estimates put FY 2017 tax revenue 39% ahead of FY 2014 whereas inflation would be 29% higher if it continues at the current pace.
The budget ‘hole’ would not exist if the majority of legislators in both parties and Governor Brownback hadn’t declined to reduce the cost of government when they reduced income taxes. As has long been the case, Kansas has a very big spending problem. Indeed, if FY 2004 spending had simply increased for inflation and population growth, General Fund spending would be $1 billion less this year!
Professor Smith apparently believes that government couldn’t possibly operate on less money, as he claims that reducing government spending will cause serious service cuts. The citizens of Kansas and even government employees beg to differ; a recent public opinion survey showed that 74% of Kansans (and 74% of government employees) believe state government could operate 5% to 10% more efficiently – and the data supports their belief. In 2012, Kansas spent 37% more per-resident than the states without an income tax. Every state provides public education, highways and social services, but some of them do so at a much better cost to taxpayers.
We need to reduce the cost of government, but it can be done by implementing a Better Service, Better Price culture that provides quality services at a better price and passes the savings on in the form of lower taxes. In other words, focus on maximizing value for citizens instead of growing government.