Wednesday evening in his second State of the State address, Governor Samuel Brownback of Kansas showed he will treat the state’s tax rates even more harshly than his staff treats potty-mouthed high school Tweeters.
With some of the most dramatic proposals put forth anywhere in the country, Brownback explained his new plan to combine three tax brackets into two lower rates while eliminating the double taxation of income from small business owners of LLCs. Cutting in state government will include not filling 2,000 positions, eliminating eight state agencies, and expanding the efforts of the new “Office of the Repealer,” run by Kansas Department of Administration Secretary Dennis Taylor, which exists solely to find burdensome regulations and laws to eliminate.
Brownback’s noted that in seven years, 15,600 Kansans have moved from the state, chasing economic opportunities elsewhere. He believes lower tax rates and pro-growth policies will be conducive to economic growth.
However, to achieve those lower rates, loopholes and deductions will have to be adjusted, and if immediate reaction in local papers is any indication, eliminating the home mortgage deduction, which is worth $390 to the average Kansas family, will be especially difficult. Other deductions to be eliminated are for adoption and day care.
The nonprofit Kansas Policy Institute‘s James Franko had lots of praise for Brownback’s address, but wished he’d heard more specifics about the looming disaster of public pensions, the same issue that is ravaging state budgets across the country. “The proposed cuts are better than the spending increases we’ve seen in prior years,” Franko told TAS, “but with Medicaid and KPERS [Kansas’ public pension system] costs set to grow rapidly, all other SGF spending needs to be reduced by about $300 million to keep Kansas from going over the cliff.”
Brownback did at least note that KPERS is the second-worst funded public pension in the country, with a true $15 billion unfunded liability. As such, he added, it is certainly an issue the legislature will have no choice but to face soon.
Watch the whole speech here.