Brownback concedes his tax cuts will cause big problems
The Kansas City Star
Kansas Gov. Sam Brownback this week finally conceded the truth: The income tax cuts that he signed into law after arch-conservative Republicans pushed them through the Legislature this year will blow a big hole in the state budget for at least the next two years.
As a result, Brownback likely will have to promote the extension of a sales tax increase on Kansans.
An increase? Let me explain.
The Legislature long ago decided that the current 6.3 percent rate would drop to 5.7 percent in mid-2013.
But now Brownback may have to keep the higher tax in place for, well, who knows how long.
As even fellow GOP supporters point out, this would be considered a tax increase. After all, Kansans have been told the last few years that the rates would go down to 5.7 percent. If they don’t, the rates will remain higher than that.
“I’m not surprised that he wants to use the sales tax, but at the same time, the Legislature made a promise that it should end,” said Senate Ways and Means Committee Chairwoman Carolyn McGinn, a Sedgwick Republican. “I see it as a tax increase.”
Why is all this happening? Because as Brownback now acknowledges, the state could lose hundreds of millions of dollars in tax revenues because of the income tax reductions.
Hmmm: Maybe Brownback and other slash-and-burn Republicans should have thought about all this earlier in 2012, when they were pursuing the tax cuts.
But this week the governor said, “There’s going to be a two-year dip” in revenues. “That’s the nature of these, when you cut taxes. If you cut them right, you get growth on the other side, but there’s a dip first.”
Of course, the governor claims the income tax reductions will lead to more jobs and higher revenues after two years.
But what if he’s wrong? What if he and the state Legislature - in his own words -did not make the “right” tax cuts?
Then Kansans can expect that higher sales tax to stay in place.