Kansas Bets On Tax Cuts To Spur Economic Growth

fromKPR

The economy has been growing in Kansas, but the state's budget is still projected to be in the red next fiscal year. A tax cut passed last year is aimed at growing the economy, but it's predicted that there will be a significant shortfall first.

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Kansas lawmakers have been trying to apply some of that fiscal discipline, too. The economy has been growing and the unemployment rate is down, but the projected budget deficit in Kansas is still more than $250 million for the coming fiscal year. And more deficits are projected after that.

Kansas Public Radio's Stephen Koranda reports on what the state is looking to do about that problem in the future and what they've already done.

(SOUNDBITE OF CHILDREN)

STEPHEN KORANDA, BYLINE: Here at Meadows Elementary School in Topeka, Kansas, around 40 first graders are in PE. They're bowling today. The kids line up the pins and knock them down with a rubber bowling ball.

(SOUNDBITE OF BOWLING PINS)

UNIDENTIFIED WOMAN: Alright, there you go. You can get back on.

KORANDA: At some schools across Kansas, PE has been cut back. At this school they've had to eliminate staff and reduce art and music classes. Meadows' principal, Nicole Dial, says she was sad to see the music program trimmed back, because many families can't supplement it.

NICOLE DIAL: Especially a low-income family that maybe can't pay for private lessons. Our kiddos that are in a lower-income family aren't going to get that opportunity unless it happens at school.

KORANDA: In recent years, lawmakers here cut hundreds of millions of dollars from the base funding per pupil that schools receive. In Topeka, that means eliminating about 100 teachers. School board member Nancy Kirk says they've tried to keep classes small, so they've had to cut specialized help for students in areas like math and reading.

NANCY KIRK: We are hurting kids because our resources to provide extra kinds of supports, children who come to us with significant challenges, whether it's poverty, whether it's English language, all these extra supports, and we don't have the dollars to do that anymore.

KORANDA: The state has also slashed agency budgets, cut back services, and laid off workers. When Kansas legislators passed a large personal and business income tax cut last year, the deficit projections ballooned. This week, Republican Governor Sam Brownback laid out plans for dealing with the deficit. And he made an announcement some consider counterintuitive: Proposing some tax increases but also a large income tax cut.

GOVERNOR SAM BROWNBACK: Tonight, we're here to take another step on our path to no state income taxes. This will create jobs and opportunities in our state.

KORANDA: The hope is the tax cuts will spur economic growth. Governor Brownback says there will likely be a downturn in tax collections first before the economy grows, but the state can manage it.

BROWNBACK: This glide path to zero will not cut funding to schools, higher education or essential safety net programs.

KORANDA: But the crux of the argument is this: Will the tax cuts spur enough economic growth in the coming years to offset the loss of revenue? If they don't, that will likely mean more and deeper cuts to things like education and mental health services.

Kansas House minority leader Paul Davis calls the tax cutting a huge gamble. He doesn't believe cutting taxes will stimulate enough economic growth to prevent cuts to state services.

STATE REPRESENTATIVE PAUL DAVIS: When you tell people that that will require us to make huge cuts to education, huge cuts to mental health programs, I don't think that people are going to be very receptive to that at all.

KORANDA: Brownback's tax plans may be controversial, but they're likely to receive a warm welcome in the legislature, with conservative Republicans now in control of both chambers.

For NPR news, I'm Stephen Koranda in Topeka, Kansas.

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