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INSIGHT KANSAS: Racing Louisiana down the revenue well

Since Sam Brownback was elected governor in 2010, the model state for Kansas has been Texas. No surprise there. Texas has made a no-income-tax model work for some time, and Brownback’s close personal friendship with former Texas Gov. Rick Perry means the two share plenty of ideas.

Chapman Rackaway is a Professor of Political Science at Fort Hays State University.
Chapman Rackaway is a Professor of Political Science at Fort Hays State University.

But “Brownback’s Bros” is a trio instead of a duo. Louisiana’s governor, Bobby Jindal, makes the third member of the low-tax party. If we look to Texas for guidance, we should also look to Louisiana as a cautionary tale.

Two years before Brownback took Cedar Crest, Jindal won the Governor’s mansion in Baton Rouge. Stop me if you’ve heard this one before: Jindal proposed the biggest tax cut in the state’s history. Jindal’s rallying cry was a bit different than Brownback’s mostly because Louisiana was flush with oil revenue and that flow of cash promised to offset the tax cuts. But a sluggish recovery and dropping oil prices have put the brakes on Jindal’s economic supercharger. Now Louisiana faces a $1.6 billion shortfall.

Jindal refuses to consider any sort of revenue enhancements, and two weeks ago publicly vowed to veto the entire state budget if any tax increases were included. Jindal wants to cut, and is doing so with zeal. Higher education will bear the cruelest brunt of the cuts, to the tune of nearly $300 million, and state flagship Louisiana State University will take the hardest hit of them all with roughly eighty percent of their state funding being lost under Jindal’s plan. In anticipation of the draconian cuts, LSU has drafted a plan for financial exigency, which allows it to bypass due process mechanisms and make deep cuts to salaried employee rolls. Fewer professors, larger classes, less student interaction. In other words, will the last one out the door please leave a steak for Mike the Tiger?

If “The Ballad of Bobby Jindal” sounds familiar it may be because its second act is playing out here. Governor Brownback’s plan was remarkably similar to Jindal’s. Jindal got a head start, but Brownback is catching up quickly. Kansas is not in Louisiana’s hole yet, but a roughly $800 million revenue gap since the income tax rate started dropping is no reason to issue a self-congratulatory press release. Louisiana whistles while Rome burns. Kansas knows the house is already on fire.

But will we look at the charred ashes of Louisiana’s experiment and decide to tread a different path, or now go headlong into the breach knowing what is coming? If LSU can be cut eighty percent by the state, then Kansas might be forced to do the same, or even extend drastic cuts to K-12 education. Will we heed the warnings from Bayou country?

Governor Brownback has an opportunity to be a hero now. The plan to attract new business and residents to Kansas was laudable, but the tax cuts did not leave enough money to fund education. The Governor has tried to paper over the cracks with block grants, but shuffling how money is distributed doesn’t add money.

New revenues are needed. Low taxes are beneficial, when feasible. Legislators in Topeka are working on tax plans that would bring some revenue in to cover the shortfall. Sales taxes seem to be the default strategy in the legislature, and interestingly enough Governor Brownback’s initial draft of the Glide Path to Zero included sales tax make-goods for the revenue reduction off of lower income taxes.

If Governor Brownback wants to avoid the disastrous legacy being left by his friend Jindal, he must be willing to sign the new taxes put forth by the state legislature. If so, he can fulfill his commitment to schools and his promise to lower taxes. If not, he could wreak the same kind of havoc here that Jindal has done to Louisiana.

Chapman Rackaway is a Professor of Political Science at Fort Hays State University.

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