About the best we can say about the tax compromise Kansas legislators agreed to last week is that it isn’t as risky as it might have been.
Not that there isn’t something in the compromise to like; after all, everybody likes tax cuts. Most Kansans and Kansas businesses will pay less in taxes next year than they do now, and they’ll pay markedly less in five years.
Income taxes for more than 190,000 businesses, mostly small businesses, will be phased out. Also, in the next year alone the sales tax will drop from the present 6.3 percent to 5.7 percent. Individual income tax rates will drop as well, with the top rate easing to 5.5 percent next year and then sliding to 4.9 percent four years later.
Gov. Sam Brownback, who had pushed even more dramatic cuts, was nevertheless content. His administration issued a statement saying, “While we would prefer lower rates, this plan is a significant step in the right direction to increasing families’ incomes and accelerates small business growth.”
We hope he’s right, but we’re far less certain than the governor is. He’s convinced that these and future tax cuts are the ticket for growth, jobs and prosperity. Our concern is that the benefits won’t be spread evenly to all Kansans. Furthermore, we’re concerned that because the tax cuts will choke off hundreds of billions of dollars in revenue that now funds many vital state programs, those Kansans who see few benefits will endure even greater hardships.
The $60 million in collective tax relief that Kansans will enjoy the first year won’t be badly missed. But the $600 million a year in tax relief Kansans enjoy by 2018 will require significant reductions in state programs and services.
In a column on this page today, Dave Colburn expresses concern about the impact of the governor’s policies on schools. Mr. Colburn’s concern is well placed. Schools, as well as other state programs and services, haven’t yet made up ground lost during the state’s financial crisis. Restoring most, if not all, of the revenue legislators stripped away to balance the state budget should be a greater priority than enacting policies certain to jeopardize future funding.
Tax cuts are welcome any time, especially in an election year. But too many lawmakers are willing to ignore the trade-offs.