Director of State Fiscal Research
Kansas lawmakers continue to debate how to find the revenue needed to fix a huge fiscal mess caused by the ill-advised, unaffordable tax cuts that Governor Sam Brownback signed into law in 2012. It’s a challenge: they need both to close the latest massive shortfall in the state’s beleaguered budget and also raise hundreds of millions of additional dollars so that school funding reaches the adequate levels that the state constitution requires.
The vast majority of Kansas lawmakers understand that to even hope to repair the state’s finances, they need to reverse course on the tax cuts, the main cause of the state’s fiscal disaster. This means taking three steps: (1) restoring the state’s top income tax rate to at least pre-tax cut levels; (2) eliminating the additional income tax rate cuts in state law that will take effect in future years; and (3) repealing a wasteful tax break for certain kinds of business income that has encouraged tax evasion.
But those steps may not be enough because the state’s Supreme Court has ruled that schools are underfunded, requiring the state to not only cover its current budget, but generate additional, permanent revenue.
Lawmakers are considering a number of proposals, including a surcharge on income taxes and a fee on utility bills. Whatever revenue solution lawmakers choose should adhere to the following three principles:
By holding to these basic principles, Kansas lawmakers can do what their constituents want them to do — reverse course on the tax cuts and get Kansas schools back on track.