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In 2012, Kansas governor Sam Brownback signed a massive tax cut into law, arguing that it would boost the state's economy. Eventually, he hoped to eliminate individual income taxes entirely. "Our place, Kansas, will show the path, the difficult path, for America to go in these troubled times," he said."WE'VE GOT RED INK UNTIL THE COWS COME HOME"
National conservative activists raved. Patrick Gleason of Americans for Tax Reform said Kansas was "the story of the next decade." The Cato Institute praised Brownback's "impressive" tax cuts and gave him an "A" on fiscal policy. And the Weekly Standard's Bill Kristol said that, if reelected, Brownback would be "a formidable presidential possibility."
Yet though Brownback is running for reelection this fall in a deep red state, he's trailed his Democratic challenger in 3 of the 4 most recent polls — and his marquee tax cut appears to be the main reason. Kansas is now hundreds of millions of dollars short in revenue collection, its job growth has laggedthe rest of the nation, and Moody's has cut the state's bond rating. "Governor Brownback came in here with an agenda to reduce the size of government, reduce taxes, and create a great economic boom," says University of Kansas professor Burdett Loomis. "Now there's been a dramatic decline in revenues, no great increase in economic activity, and we've got red ink until the cows come home."
The governor proposed to cut income taxes on the state's highest earners from 6.45 percent to 4.9 percent, to simplify tax brackets, and to eliminate state income taxes on most small business income entirely. In a nod to fiscal responsibility, though, he proposed to end several tax deductions and exemptions, including the well-liked home mortgage interest deduction. This would help pay for the cuts.
Yet as the bill went through the state Senate, these deductions proved too popular, and legislators voted to keep them all. The bill's estimated price tag rose from about $105 million to $800 million, but Brownback kept supporting it anyway. "I'm gonna sign this bill, I'm excited about the prospects for it, and I'm very thankful for how God has blessed our state," he said.
After the cuts became law, it was undisputed that Kansas's revenue collections would fall. But some supply-side analysts, like economist Arthur Laffer, argued that increased economic growth would deliver more revenue that would help cushion this impact.
Yet it's now clear that the revenue shortfalls are much worse than expected. "State general fund revenue is down over $700 million from last year," Duane Goossen, a former state budget director, told me. "That's a bigger drop than the state had in the whole three years of the recession," he said — and it's a huge chunk of the state's $6 billion budget. Goossen added that the Kansas's surplus, which had been replenished since the recession, "is now being spent at an alarming, amazing rate." You can see that in this chart (the surplus is cumulative, not yearly):
Read more @: Kansas was supposed to be the GOP :shock: Paradise? Yea right. Brownback has been destroying this state. Bankrupt, cutting education, and destroying the public sector. This is the GOP paradise? no thank you.
