At the March 19, legislative coffee local legislators talked about the Kansas Supreme Court ruling requiring equitable funding for schools. Sen. Mitch Holmes agreed this was the gorilla in the room. This of course, is not true. By definition, the gorilla in the room is what we do not talk about.
2016 will be the fourth year of the Kansas income tax cuts. Through these four years, those of us at about the 80th income percentile, with an annual household income of $100,000, will have accumulated about $4,000 more in our pockets due to the tax cuts. Those of us at about the 95th percentile, with an annual household income of $200,000, will have about $11,000 of additional cash. For those of us whose income is from a business which we take half of as salary, the additional effect of the business income exemption will increase our totals to about $13,000 and $30,000, respectively.
In the Governors Budget Report FY 2017 Gov. Brownback declares that the growth in public spending and education should be limited to inflation. As an example, he derided the 1966 to 2010 time period because spending growth exceeded inflation. This is the credo adopted by those in political control of the legislature.
But the wealth we produce in our economy grows faster than inflation. If public spending growth is limited to inflation the share of wealth we devote to education and public works will decrease in perpetuity. It is rigged math.
From 1966 to 2010, state tax revenues increased at annual rate of 6.97% ($334.5 million to $6,493.0 million, Kansas Statistical Abstract KU Institute for Policy & Social Research). This was very close to the 6.71% annual growth in personal income ($6.5 billion to $112.2 billion, U.S. Bureau of Economic Analysis) and much higher than the 4.43% annual inflation rate. If growth in education and public works had been limited to inflation we would be educating our children and maintaining our roads with 60% less funds. Limiting growth to inflation is historically false.
The income tax legislation requires further income tax cuts if revenue growth exceeds 2.0%. It is not only rigged math; it is state law, voted for by Sen. Holmes.
Maybe diverting $1.6 billion of highway funds, issuing $1.0 billion of KPERS bonds, issuing $400 million of additional highway bonds and sweeping up every imaginable dedicated fund to pay for the income tax cuts is proper. Maybe giving our children inflation limited funding while we grew up with funds that matched our growth in wealth is honoring our heritage. Maybe, especially for those of us with higher incomes, perpetuating the income tax cuts is the morally responsible choice. And maybe a camel can pass through the eye of a needle.