The Kansas Republican Governance Experiment. Or Is That “Governance ‘Experiment'”? Or Is That “‘Governance’ Experiment”?
Just look at this:
Kansas is—in some strong sense—unbelievably loony.
No sooner does Sam Brownback manage to plant his behind in the Governor’s chair in Topeka, KS than does Kansas’s share of American nonfarm jobs and people start to drop like a stone. It is not so much absolute net flight—there were 1.397 million nonfarm jobs in Kansas at the last business cycle peak in April 2008; there are 1.400 million nonfarm jobs in Kansas today. But Kansas has seen none of the country’s net employment growth over the past decade: the jobs it lost in the 2007-2009 recession it has barely recovered, while the country has recovered what was lost and has added on almost as many more in addition.
There is no sense in which the share of U.S. nonfarm employment in Kansas was in any sort of long-run decline: the employment share was strongly up at the start of the 1990s, flat in the mid-1990s, up and down into the 2000s, down in the mid-2000s, up again in the late 2000s. But since Brownback took the chair over from Kathleen Sibelius and Mark Parkinson, it has been down, down, down, down. A fall of 6%-points in the relative share of employment in little more than six short years is astonishing in its rapidity.
Nothing like this was seen before. Yes, Kansas’s share of U.S. nonfarm employment shrank from 1995-2003 under Republican Governor Graves, but there ups as well as downs—and the net shift was strong. Yes, Kansas’s share of nonfarm employment grew under both Graves’s Democratic predecessor Finney and his successors Sibelius and Parkinson—but there were downs as well as ups. It is only under Brownback that it has been down, down, down, down. You can argue how much of it is hostility to immigrants and strangers. How much of it is the profoundly un-Christian cast of a “Christian” government, and how much of it is the collapse of public services. But it has been effective.
My friend Dan Davies says that the best proof that there is a skill and art of management comes from the fact that nobody doubts that there is such a thing as gross mismanagement. Similarly, the best proof that there is such a thing as good technocratic government leading to shared prosperity and equitable growth is… Brownback, and his acolytes and supporters, in Kansas:
You can’t blame this on farm or oil or natural gas booms or busts. You can’t blame this on “globalization” or whatever. It is what it is.
The Kansas City Star sums it up:
Kansas City Star: Kansas will spend years paying for Gov. Sam Brownback’s policies: “Look back at what the governor’s conservative economic policies will cost taxpayers for years to come… http://www.kansascity.com/opinion/editorials/article164297657.html
…Brownback leaves a financial train wreck in his wake. From the state’s drained highway fund to its beleaguered pension system for state workers, Kansas taxpayers now have a lot of fiscal ground to make up. In fact, the total reaches into the billions. Our advice to taxpayers: Grab a shovel and start digging. Escaping from this fiscal mess is going to take a lot of work—and possibly still more tax increases, as we’ve pointed out. “For a small Midwestern state, it’s a massive hole,” said Senate Minority Leader Anthony Hensley, a Topeka Democrat. “And it’s going to take years to recover.” At this point, there’s no excuse for anybody to be surprised….
On the day in 2012 when Brownback signed the tax-cut bill, critics were already forecasting fiscal doomsday. The measure slashed state income taxes by roughly $3.7 billion over five years. State financial analysts were predicting budget deficits totaling $2.5 billion in 2018. Undaunted, Brownback insisted that the improved business climate would benefit all. “We’re going to move this forward and make it work and take care of our fundamental services,” Brownback said that day….
Since Brownback’s first year in office, the state has raided various funds or delayed payments to the tune of $3.1 billion… $2.5 billion in payments to the state highway fund… diverted… delayed payments totaling more than $407 million from the employee retirement system…. Economic development programs were raided to the tune of $125 million. About $47 million intended for children’s programs was diverted… borrowed $1 billion and deposited it into the retirement account for needed stability. That money will have to be repaid, and so will the $407 million to make pension payments. Likewise, we’ll never know what was lost in terms of progress for kids via those early childhood programs. Years from now, taxpayers will still be footing the Brownback bill…
Bill Gale: The Kansas tax cut experiment: “Aimed to boost the Kansas economy… https://www.brookings.edu/blog/unpacked/2017/07/11/the-kansas-tax-cut-experiment/amp/
…[it] led to sluggish growth, lower than expected revenues, and brutal cuts to government programs…. One of the cleanest experiments for measuring the effects of tax cuts on economic growth in the U.S., were eventually reversed by a Republican-controlled legislature as a failure…. [Do] not… expect tax cuts to boost the economy much, if at all…. The tax reform discussion should include what it is that citizens are getting from the taxes they pay…
Paul Krugman: We’re Not Even In Kansas Anymore/span>: “Will the end of the Kansas tax-cut experiment… https://mobile.nytimes.com/blogs/krugman/2017/06/12/were-not-even-in-kansas-anymore/?referer=
…hey, that’s what Brownback himself called it, although he refused to accept the crystal-clear results of that experiment—mark a turning point in U.S. politics?… I have my doubts…. There was an idea, a theory, behind the Kansas tax cuts: the claim that cutting taxes on the wealthy would produce explosive economic growth. It was a foolish theory…. But still, it was a theory, and eventually the theory’s failure was too much even for Republican legislators. Now consider the AHCA, aka Trumpcare…. What’s the theory behind their proposed replacement?… Wat we’re seeing now is so bad, so cynical, that it makes the Kansas experiment looks like a model of idealism and honesty by comparison. I don’t think we’re in Kansas anymore. We’re now in someplace much, much worse…
Greg Leiserson: It’s no surprise that the Kansas tax cut experiment failed to create jobs: “If federal policymakers are looking for a supply-side tax reform that would create jobs… https://equitablegrowth.org/research-analysis/its-no-surprise-that-the-kansas-tax-cut-experiment-failed-to-create-jobs/
…then they could expand the Earned Income Tax Credit… for low-income families, particularly workers without dependent children…. A substantial academic literature finds that the EITC boosts labor supply, creating jobs…. Even an unprecedentedly large expansion of the EITC could be accomplished for a fraction of the cost of President Trump’s high-income and business tax cuts…
Yael Abouhalkah: Good riddance to Sam Brownback, a disaster as Kansas governor: “Kansas soon will lose its disastrous, unpopular governor… http://yaelabouhalkah.com/2017/07/good-riddance-to-sam-brownback-a-disaster-as-kansas-governor/
…His critics on Wednesday quickly pointed out the governor’s tremendous failures, while his supporters gave some outright loony reasons for saying he’d done great things. Brownback’s reckless income tax cuts starting in 2013 almost bankrupted the state, damaged funding for roads and education, and made Kansas into a laughingstock across the nation. For good reasons, Kansans made Brownback one of the most unpopular governors in America in a few polls…. It will take years to rebuild the institutions that Sam Brownback badly damaged as governor. Good riddance to him…
David Atkins: Austerity Fever Breaks in Kansas, Rebuking the Conservative Cult: “When Oklahomans cut taxes so deeply that they can’t afford to run their own schools more than four days a week…
…that’s not an act of prejudice, or a wistful vote to bring back the factories, or an angry yawp to punish rich coastal elites. That’s an act of political blood sacrifice…. So it’s heartening in a way to see that Kansas, which has long been ground zero for the most extreme version of tax-cut orthodoxy in America and has suffered mightily for it, is finally coming to its senses somewhat…. Not that there isn’t resistance from the true believers:
Dan Cox… said that Brownback’s defeat did not augur more victories for Republicans pursuing more moderate economic policies. He said Republican policymakers and their advisers around the country are likely to view the example of Kansas as a failure of implementation, rather than one of principle, and they will argue that Kansas’s experiment would have succeeded had the legislature reduced spending even more. Moreover, Cox said, the business lobby remains more influential in the party than those who support centrist or populist points of view…
Wall Street Journal: Brownback’s Tax Lesson: “After surviving a liberal blitzkrieg, re-elected Kansas Governor Sam Brownback is now getting whipsawed for scaling back his tax cuts… https://www.wsj.com/articles/brownbacks-tax-lesson-1422576747
…Income tax receipts have fallen short of the state projections from last summer, turning a $380 million budget reserve into a two-year $700 million hole. Liberals claim the shortfall is proof that tax reform is a sham, but Mr. Brownback never claimed his plan would be instant Miracle Gro for public coffers…. The Governor’s major blunder was assuming that reduced revenues would induce lawmakers to scale back entitlements…. As Steve Moore describes nearby, Republican governors across the country are still making tax cuts a priority, despite the claims by some of our liberal friends that Mr. Brownback’s travails have shut them down. The difference is that some of them are moving more cautiously than they might if the economy were growing faster and revenues were rising. The real moral of Mr. Brownback’s unfortunate story is that lower tax rates are hard to sustain without either faster economic growth or restraints on government…
Wall Street Journal: Review & Outlook: What’s Right With Kansas: “Governor Brownback calls the bluff of GOP tax-cut opponents… https://www.wsj.com/articles/SB10001424052702304070304577394340998558490
…Mr. Brownback has made pro-growth tax reform his highest priority…. Mr. Brownback says the income tax cut will put Kansas “on a road to faster growth.”… Low tax rates aren’t the only policy needed for growth, and Kansas would be better off had Senate Republicans agreed to reduce loopholes while cutting rates. But the tax cut will force state politicians to restrain spending, and above all it sends a signal to businesses and taxpayers that Kansas wants more of both…
Steve Forbes, Larry Kudlow, Arthur Laffer, and Stephen Moore: Why Are Republicans Making Tax Reform So Hard?: “President Trump and the Republicans need a legislative victory… https://www.nytimes.com/2017/04/19/opinion/why-are-republicans-making-tax-reform-so-hard.html?_r=2
…Tax reform probably should have gone first, but now is the time to move it forward with urgency…. Cut the federal corporate and small-business highest tax rate to 15 percent from 35 percent…. Allow businesses to immediately deduct the full cost of their capital purchases…. Impose a low tax on the repatriation of foreign profits brought back to the United States…. President Trump and Paul Ryan, the speaker of the House, should stop insisting on “revenue neutrality.” In the short term, the bill will add to the deficit…
Eric Levitz: The Republican Party Must Answer for What It Did to Kansas and Louisiana: “Over the course of 12 debates, the Republican presidential candidates were never asked to address the budget problems in Kansas… http://nymag.com/daily/intelligencer/2016/03/gop-must-answer-for-what-it-did-to-kansas.html
…In 2010, the tea-party wave put Sam Brownback into the Sunflower State’s governor’s mansion and Republican majorities in both houses of its legislature. Together, they implemented the conservative movement’s blueprint for Utopia: They passed massive tax breaks for the wealthy and repealed all income taxes on more than 100,000 businesses. They tightened welfare requirements, privatized the delivery of Medicaid, cut $200 million from the education budget, eliminated four state agencies and 2,000 government employees. In 2012, Brownback helped replace the few remaining moderate Republicans in the legislature with conservative true believers. The following January, after signing the largest tax cut in Kansas history, Brownback told the Wall Street Journal, “My focus is to create a red-state model that allows the Republican ticket to say, ‘See, we’ve got a different way, and it works.’” As you’ve probably guessed, that model collapsed…
Russell Berman: Republicans Reverse Tax Cuts in Kansas: “The Death of Kansas’s Conservative Experiment… https://www.theatlantic.com/politics/archive/2017/06/kansass-conservative-tax-experiment-is-dead/529551/
…Republicans in the state legislature on Tuesday voted to reverse Governor Sam Brownback’s signature tax cuts, dealing a blow to the kind of fiscal policy the Trump administration wants to enact nationally…. For Brownback, a former senator and one-time presidential hopeful, the vote was nothing less than a humiliation. He had hailed his tax cuts as “a real live experiment” in conservative governance and offered them up as a model for other states and the Trump administration. Instead, they left him as the most unpopular governor in the country, who was reportedly casting about for a federal posting that would allow him to escape Topeka before the legislature could eviscerate his legacy. “The Brownback experiment didn’t work. We saw that loud and clear,” said Heidi Holliday, executive director of the Kansas Center for Economic Growth…
Ben Casselman et al.: The Kansas Experiment Is Bad News For Trump’s Tax Cuts: “The most interesting policy news of the week may have come from 1,000 miles away, in Topeka, Kansas… https://fivethirtyeight.com/features/the-kansas-experiment-is-bad-news-for-trumps-tax-cuts/?ex_cid=trumpbeat
…The Kansas state legislature on Tuesday voted to override Gov. Sam Brownback’s veto and roll back $1.2 billion of tax cuts over two years. The vote marked a bipartisan repudiation of what Brownback had described as an “experiment” in a particular brand of anti-tax fiscal conservatism. The failure of that experiment has implications beyond Kansas because Brownback’s approach was meant to be a model for conservatives elsewhere, including in Washington. (It was drafted with the help of prominent conservative thinkers, including former Ronald Reagan adviser Arthur Laffer and Heritage Foundation economist Stephen Moore.) Brownback’s version was particularly radical: He aimed to push personal income taxes to zero and exempted certain kinds of businesses, known as “pass-through” entities, from taxes entirely…. Brownback and his supporters predicted that cutting taxes would create jobs and spur entrepreneurship while boosting government revenue. That isn’t what happened…
Tracy M. Turner and Brandon Blagg: The Short-term Effects of the Kansas Income Tax Cuts on Employment Growth: “The state of Kansas made dramatic changes to the structure of its personal income tax… http://journals.sagepub.com/doi/pdf/10.1177/1091142117699274
…by eliminating taxation of business income and lowering marginal tax rates on other personal income sources. Proponents of the legislation maintain that the tax reductions will stimulate employment growth. Using a difference-in-differences approach, we estimate the impact of the tax changes on private-sector employment in the state of Kansas, relative to its border states, using data on the number of establishment employees and proprietors. We apply multistate county fixed effect model and county-border matching approaches to identify tax effects. Our findings indicate that two years post enactment, the tax law changes have not yielded a net increase in private-sector employment…