Yeah, nice try Brownback but no one's buying it:As if New Jersey Gov. Chris Christie (R) didn’t have enough troubles with his ongoing scandals, his state finances are nearly as embarrassing. Because the governor was completely wrong – and he bullied those who were right – New Jersey has seen its debt downgraded five times since Christie took office five years ago.
Add Christie’s troubles with job creation and a growing state budget deficit, and we’re left with a governor who clearly can’t pivot from his many controversies to his governing record.
Pushed for an explanation for his state’s financial problems, Christie has an answer: the buck stops somewhere else.
“What we’re being told initially is that this is the effect of the change in the law at the end of 2012 by the Obama administration and the Congress to increase tax rates on upper-level individuals,” Christie said.
The Republican governor was warned that his budget math didn’t add up; he ignored the warnings; and Christie still wants to blame the president.
And he’s not the only one. Kansas Gov. Sam Brownback (R) pushed through tax cuts his state couldn’t afford, leading to a bond-rating downgrade, and creating “a hole in the state’s finances without noticeable economic growth.” Guess what happened next.
“What we are seeing today is the effect of tax increases implemented by the Obama administration that resulted in lower income tax payments and a depressed business environment,” Gov. Sam Brownback said in a statement. “The failed economic policies of the Obama administration are affecting states throughout the nation.”
And Moody's also pointed out something else:In 2012, Kansas' Republican Gov. Sam Brownback signed a rollback in the state's graduated income tax system that cut the rate paid by top earners by 24 percent and the rate paid by low-income earners by 14 percent. The measure also slashed levies on small businesses.
"Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy," he wrote in an op-ed that July. "It will pave the way to the creation of tens of thousands of new jobs ... (and) directly benefit our schools and local governments."
Game on, then!
A timely test of the theory that tax cuts in effect pay for themselves by goosing the economy, a magic win-win leaving nearly everyone better off.
And how's that going?
Well, two weeks ago Moody's Investment Service downgraded Kansas' bond rating in response to the news that April's tax receipts were $93 million lower than projections; 45 percent lower than April 2013 revenues.
"The downgrade reflects Kansas' relatively sluggish recovery compared with its peers," said Moody's press release. The rating agency cited "revenue reductions (resulting from tax cuts) which have not been fully offset by recurring spending cuts" among the causes and noted that the phasing-in of new tax cuts "will continue to exert pressure on the budget."
"The 'great experiment' is falling flat," editorialized the Leavenworth Times last week. "In five years' time, the (revenue) loss is predicted to rise to 16 percent. Kansas, in effect, will self-impose its own economic depression."
Over the weekend, The Kansas City Star looked at U.S. Bureau of Labor Statistics charts and reported that employment in Kansas is up 1.4 percent since January 2013, but is lagging behind the U.S. job growth average of 2 percent and behind the employment growth figures in three of four bordering states.
The paper editorialized: "The governor's economic plan is not helping Kansas keep up with most of its neighbors, much less pull ahead of them." - Chicago Tribune, 5/14/14
http://www.kansascity.com/...Moody's Investor Services, which downgraded Kansas bonds last month, has issued a more detailed report that says because of tax cuts, Kansas will need to make more spending cuts.
"The state's ability to achieve structural balance long-term will depend to an increasing degree on its capacity for spending cuts," the Moody's report said.
Moody's report said that more spending cuts will be difficult to achieve because of court-ordered school funding, federal mandates in programs such as Medicaid, and legal requirements to fund the state pension system.
"These constraints could also lead the state to continue to utilize credit-negative actions such as appropriation from other one-time sources like the state highway fund," the report said. - Lawrence Journal-World, 5/13/14
Meanwhile, Paul Davis (D. KS) has been hitting the campaign trail building support:A fundraising letter sent out by Gov. Sam Brownback’s re-election campaign misstates the amount of money that was in the state’s coffers the day Brownback took office.
The letter, sent out earlier this month and signed by the governor, refutes criticism from political opponents and solicits donations to the governor’s re-election campaign. It includes a list of accomplishments.
But a claim at the top of the list about how much more money is the state’s bank account since the governor took office mixes amounts with the wrong dates.
“When I was sworn in, State Treasurer Ron Estes informed me that the state had a shocking $876.05 in the bank. But as of January 1st, that amount has grown to $764 million on hand,” the letter states.
Cash on hand is how much money the state has available to write checks on a specific date. It fluctuates daily as the state takes in revenue and pays its bills.
The state did have $876 on hand at one point — at the end of fiscal 2010, six months before the governor took office.
At the beginning of January 2011, a week before Brownback took office, the state’s cash on hand was about $238 million, according to the nonpartisan Kansas Legislative Research Department.
The $764 million figure the letter cites for Jan. 1 is actually from July 30, 2013, the end of the fiscal year 2013, according to interim budget director Jon Hummel.
By Dec. 31, 2013, after months of spending, the state had about $280 million on hand, according to Legislative Research. - Kansas City Star, 5/14/14
Davis has also been making health care an issue:Davis said he is pleased with how campaigning is currently progressing. He expressed that the largest challenge facing him during campaigning is being a Democrat in Kansas. While that is a barrier in a predominately Republican state, Davis is seeing support from Democrats and Republicans alike. He attributes this to his past success of working with Republicans in the House as well as the failure of the Brownback tax plan that has affected individuals from both parties.
“We have a lot of support from Republicans which we obviously need,” Davis said. “We have been really pleased with that. I think that the news over the last couple of weeks is just further evidence that people are becoming more and more convinced that the Brownback tax plan is not working.”
Davis said he agrees that the tax plan is not working. He also indicated that the worst is not over with projected losses continuing.
“What I have been told through legislative research is that revenue numbers are going to continue to drop and they were talking about the possibility of a $350 million loss the rest of this fiscal year and beyond into the next fiscal year below estimates,” he said. “That is a really substantial amount of money and then you add that onto a projected deficit that is over a billion dollars the next five years and the state is in a really bad financial situation here.”
On the campaign trail, Davis said he also is hearing a great deal of concerns about the public schools. Education is a top priority to Davis, he said. His parents were both teachers and he has a young daughter that will begin attending public school within the next year. The concerns he hears from Kansans regarding teacher tenure, adequate school funding and the rising cost of higher education are concerns he shares.
“The other thing I’m really hearing a lot is the concern about public schools and the state of education in Kansas,” said Davis. “It is unfortunate that it has taken a court case to get the governor and legislature to take some action.”
Throughout his time in the House and the time spent visiting with Kansans, Davis said he has a grasp on the main concerns facing the state. He said the process to turn the Kansas economy around won’t be easy or quick. But he said he does have some ideas that he believes would help improve the economic environment of the state.
“I think what we have got to do is just change the entire approach to how we are growing the economy here,” said Davis. “The governor’s approach has been to put all the eggs in one basket and to cut income taxes, primarily for people at the top end of the income tax scale. It’s just not working and it’s not going to work. I think what we need to do is take the finite resources that we have as a state and really invest them in targeted areas where the state has some strengths. We can’t afford to take a blanketed approach and hope that we are going to gain some jobs.” - The Emporia Gazette, 5/13/14
If you would like to donate and get involved with Davis' campaign, you can do so here:Davis said he also was concerned about the state’s direction concerning health care.
He said he does not support the state’s attempt to join a health care compact and privatize Medicare.
“Most seniors in the state are happy with Medicare the way it is,” he said. “ I don’t think the state should be getting in the business of taking over Medicare. The state should leave Medicare as it is and not interfere with a program that 450,000 people depend on.”
A similar move with Medicaid has not helped benefit recipients.
Davis said outsourcing Medicaid to three out-of-state insurance companies has resulted in many people with disabilities having to fight for coverage.
Mental health professionals also have said they do not have the resources they need because of cuts in state funding. - McPherson Sentinel, 5/12/14