If you felt the ground shaking last week, there’s a reason why: the Kansas state legislature caused a political earthquake by rejecting Gov. Brownback’s disastrous, failed tax policy. In 2012, the Kansas legislature passed Brownback’s extreme right-wing tax plan, something the governor himself described as a “live experiment.” The experiment proved to be a failure and a disaster for the people of Kansas. Now that the Kansas legislature has finally voted to responsibly raise revenue, the state should be able to honor its promises and fully fund public schools, public pensions, and other critical needs.
The tax plan passed five years ago slashed income taxes massively. Most notoriously, it also eliminated taxes on pass-throughs for LLCs, S-corporations, and other entities. According to one state senator, that exemption alone “granted 43 percent of the tax benefit to 0.67 percent of filers.” When the tax cuts passed in 2012, Brownback said they would be a “shot in the arm” to the Kansas economy. Instead, they caused a massive loss in revenue for the state, which forced the legislature to repeatedly cut the budget to the bone.
One consequence of the lost revenue was a serious threat to the funding of the Kansas Public Employees Retirement System (KPERS). Last year, Brownback delayed an almost $100 million payment to KPERS with the promise of paying it back plus 7% interest. He did not pay back the original amount owed and in his budget this year, he proposed not only to never pay that money back, but to cap payments to KPERS going forward. This is about the worst thing a state can do to its public pension system, other than closing it completely. Public pension funds depend on regular, full payments of contributions from employees and employers. Employees pay into the pension fund out of every paycheck. Trouble usually arises when the state starts skipping its payments.
The responsible revenue-raising legislation passed last week by the state legislature was immediately vetoed by Brownback, who still refuses to admit that his policy failed. Amazingly, though, the Kansas legislature voted in a bipartisan fashion to override the governor’s veto. Even legislators who did not vote in favor of the revenue measure did vote to support the override. It’s clear that Kansas voters are fed up after years of inaction by their politicians while their schools suffer and their road repair budgets are decimated. The bipartisan coalition that overrode the governor’s veto proves that when enough citizens demand change, change can happen.
Now that Kansas will once again be able to collect enough revenue to properly fund essential state functions, it should be able to keep its commitments to funding KPERS. With Brownback’s failed tax experiment in the rearview mirror, there is no reason for the legislature to continue skipping payments or in other ways failing to keep its promise of a secure retirement for hard-working state employees. Unfortunately, in the budget passed by the legislature over the weekend, payments to KPERS are shorted by almost $200 million in 2019. This shows that even after a victory like the passage of the revenue-raising legislation, working families and their allies must still remain vigilant about threats to the funding of public pensions.