Public pensions play a major role in state budgets. This also means that the budget and tax decisions made by state legislatures and governors have a big impact on public pensions. In no state is this relationship better demonstrated than Kansas. Since the election in 2010 of right-wing Governor Sam Brownback, Kansas has been gripped by a shockingly naive right-wing tax policy fixation. This has had a disastrous impact on Kansas’ public pensions.
After his election in 2010, Governor Brownback worked with the conservative Kansas state legislature to pass a series of massive income tax cuts. Brownback promised that these tax cuts would create economic growth in the state. What they created instead is a massive budget deficit.
In the three years since Brownback’s tax cuts were passed, Kansas has lost $680 million a year in income taxes. This has forced the legislature to cut the budget to the bone by cutting funding for higher education, taking money from the highway fund, and delaying payments to the public pensions. Kansas is currently in a self-created “fiscal hell.” One consequence of this is that Brownback delayed making a nearly $100 million contribution to the Kansas pension system this year. This move endangers the recovery of the public pensions from the Great Recession.
Sam Brownback is not the only governor whose blind obedience to right-wing tax policy has done damage to his state’s economy and pension system. Former Louisiana Governor Bobby Jindal enacted similarly disastrous tax policy in his state and now Louisiana, like Kansas, is facing massive budget deficits and threats to its public pensions. New Jersey Governor Chris Christie has made a number of extremely harmful decisions regarding his state’s public pensions, including skipping payments and violating the terms of his own pension law. Disturbingly, Christie is one of the top advisors to Republican presidential nominee Donald Trump.
For several years now, Kansas has been in the midst of a self-created economic and fiscal nightmare. The retirement security of thousands of teachers, firefighters, and other hard-working public employees is at risk. Fortunately, the solution is simple: Kansas needs to reverse the damaging income tax cuts and abandon its commitment to harmful right-wing tax policy. After that, it needs to make its contributions to the pension systems in full each year. After all, paying the full annual required contribution is the single most important thing a state can do to have a well-funded public pension system.