Without the dramatics, state budget makers in Missouri are accomplishing outcomes similar to Kansans.
The budgets pushed through by Gov. Sam Brownback and his arch-conservative colleagues famously starved Kansas of money needed for schools and other essential services, leading Republicans to rebel and vote for tax increases over the opposition of the governor, making a statement heard around the country.
The Kansas experiment was the latest attempt to prove cutting taxes will produce more tax revenue. Once again the recurring truth emerges. Economic stimulation from Kansas-style tax cuts never produces offsetting tax revenue gains. The Kansas experience is typical. Revenue gains from tax cuts cover about one-third the losses.
In Missouri, no such political drama was involved but the scenario is familiar. At the same time state revenues are failing to meet budget projections previously enacted tax cuts are kicking in, exacerbating the situation. Budget hawks including Republican Gov. Eric Greitens might welcome the incessant pressure on public spending but supporters of essential services like education, health care and transportation are increasingly worried.
As savvy readers know, less than half the state budget is available for such programs. The rest is earmarked by prior decisions. In years when revenue is tight law makers and the governor must balance the budget by cutting where they can, usually starting with education. This fiscal year revenue is expected to fall short of projections by as much as $150 million requiring Greitens to make additional “withholds.” The University of Missouri is expected to get its share of additional cuts.
For next fiscal year more reductions are expected, not least because at the same time anticipated revenue is weak tax cuts passed in 2014 will kick in, reducing revenue from top income and business taxes by about $90 million a year for five years.
So, in their own way, Missouri legislative conservatives are creating a budget a lot like the one their counterparts made in Kansas, just not so draconian. Let’s call ours “Kansas light,” a designation Missourians surely will not want to adopt perennially.
The tax avoidance birds are coming home to roost in public budgets around the nation. Jurisdiction after jurisdiction is running out of money to pay for the essential services government must provide while the taxpayer gap widens. For a while squeezing public budgets has merit, but in the U.S. a tipping point is here. Wise priorities must be reflected but public budgets must have enough revenue to meet essential services, and it’s obvious the money must come from adequate taxes on those who can afford to pay.
These days Missouri is consistently in the bottom tier meeting important public needs. Like Kansas, we are taking parsimony too far.
— The Columbia Daily Tribune, Columbia, Missouri