Letter to the Editor: Offering Ideas to Close a Significant Budget Gap
With tax revenues plummeting, and projected to continue that trend for the foreseeable future, I wrote the following article (which appeared in some newspapers) to provide taxpayers and legislators with a simple, straightforward solution for dealing with bringing state spending in line with the reduced revenue.
"I’ve read with interest media reports from across Kansas about the April 20th revenue estimates released by the Consensus Revenue Estimating Group (CREG) and the reaction from elected officials to the estimates.
The CREG meets each April and November to forecast tax collections for Kansas – a nearly impossible task. Currently, the CREG projections are used by the Governor and Legislature to build the state budget.
Because no human can accurately predict the future, and the CREG has regularly predicted incorrectly, I support a proposal to change the process so the Legislature builds the state budget based on the average of the previous three year’s actual tax collections. Making such a change would do several things – reduce state government spending, finally allow Kansas to build a rainy- day fund and start reducing the tax burden on Kansas families and job creators.
I realize numbers can be difficult to track, so I’ll attempt to be brief and concise.
The April 2020 CREG projections say over the next two years Kansas is expected to collect $1.27 billion less than what they projected in November 2019. A significant and serious reduction, but not insurmountable. The Legislature can take steps to address the problem with little to no impact on Kansas taxpayers. I’ll explain.
As I previously mentioned, On March 19th, when the Legislature approved expenditures for the remainder of FY ’20 and for FY ’21, everyone knew we were dealing with a global pandemic (COVID-19) and that revenue would take a sharp downward turn. But I guess legislators didn’t see things that way. Something that amazes and frustrates me, and should concern every Kansas taxpayer, is that the Legislature approved spending increases that significantly exceeded the November 2019 projections – by $527.6 million! And, (that’s not all!) the approved 2021 spending is a $991.3 million increase – from $7.033 billion to $8.024 billion – over the actual 2019 spending.
Some legislators are telling taxpayers they passed a “basic” or “bare-bones” budget. What!? You’ve got to be kidding! Increasing spending by nearly a billion dollars and outspending revenue projections by more than $500 million (half a billion) is NOT a bare-bones budget.
To close the $1.27 billion budget gap, some will propose increasing taxes. That should not even be a part of the discussion – Kansas taxes are already too high. Remember, it was just three short years ago that the Legislature passed the largest tax increase in the history of Kansas. It was actually two tax increases squeezed into one bill. Voting in June 2017, they said every working Kansan must pay higher taxes for the year – and the increase was retroactive to January 2017. Then when January 1st of 2018 arrived, taxes went up again. Kansas families and businesses are still dealing with the effects of that massive tax increase.
There are specific areas the Legislature could (and should) reduce spending, but the 2020 Legislative Session is near conclusion and time is short. All that needs to be done is go back to the spending level of 2019 – with a small adjustment for inflation. Quick, simple and effective."