Kansas government is at a crossroads. One path leads to economic malaise, and an ever-increasing budget financed on the backs of those living paycheck to paycheck. Another path leads to a self-sustaining economy, where every tax dollar spent is knowingly tied to a public benefit. As Kansas lawmakers await and consider Governor Laura Kelly’s tax and spend budget, there is a path to a budget that makes economic growth, recession protection, and tax relief attainable.
COVID-19 has brought many challenges for Kansans and lawmakers. Under the unprecedented public health and economic crisis, the Kansas budget is slated for multiple hundred-million-dollar shortfalls in just two years. However, despite the deficit threat, there remains an opportunity to turn the shortfall into savings. We considered education and discretionary savings together to lower the size of the government while not endangering government services.
The adjacent table shows the opportunities to save taxpayers roughly $835 million (Sum of Education and Discretionary Savings) and allows for an $85 million tax relief package. *Read the full report below or download here* That tax relief package includes, returning 100% of the 2017 Federal Tax Cut Windfall to Kansas families, lowering Kansas corporate tax burdens by decoupling from Federal GILTI provisions, and following SCOTUS guidance on taxing online marketplaces. Ultimately, it leaves up to $750 million to shore up the state budget for the next potential emergency. This budget also means no more additional transfers from the highway fund and maintains scheduled KPERS payments.
Where do these opportunities to save come from? The “Total Education Savings” come from utilizing unspent money, removing “ghost” students from the rolls, and asking schools to realize they are part of a larger state enterprise. The “Total Discretionary Savings” come from a review of vendor payments. Using a performance-based-budgeting process identifies these savings, leading to smaller deficits, economic growth, and even higher approval ratings from constituents.
If the Kansas government wants to help Kansas families recover from the unprecedented COVID-19 recession, it must act more like the private sector. That means making continuous improvement to its operating and budget processes so that services improve, and Kansans’ welfare bounces back. Fiscal discipline is understandably difficult, but it is the right path the take.