You Get What You Pay For: Taxes and the Public Schools
Slashing income taxes will not grow your state’s economy, but it will very likely destroy your public schools. If your state rolls back income taxes, your public schools will inevitably have fewer guidance counselors, and class sizes will be bigger—that is unless you can pass extra taxes locally to make up for the cuts in state revenue. It is an old maxim: You get what you pay for.
Here is the warning that came in mid-May from the Center on Budget and Policy Priorities: “More than a dozen states have cut personal income tax rates in recent years in hopes of spurring their economies in the aftermath of the Great Recession. Five states—Kansas, Maine, North Carolina, Ohio, and Wisconsin—enacted especially large cuts in the last five years. In all five states, leading policymakers claimed that the tax cuts would produce stronger economic growth. For example, after signing the cuts in his state, Kansas Governor Sam Brownback claimed, ‘Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy.’ None of these big tax-cutting states have seen their economies surge since enacting the tax cuts.”
The Center on Budget and Policy Priorities report continues: “Four of the five states that enacted the largest personal income tax cuts in the last few years have had slower job growth since enacting their cuts than the nation as a whole… States with the biggest tax cuts in the 1990s grew jobs during the next economic cycle at an average rate only one-third as large as more cautious states… Kansas, which enacted the most aggressive personal income tax cuts of recent years, has nearly drained its operating reserves to pay for the tax cuts. It now faces hundreds of millions of dollars in cuts to funding for schools and other priorities already damaged by the recession.” It’s a race to the bottom among the tax-slashing states: “Because states must balance their budgets, they must pay for tax cuts by cutting state services, raising other taxes, or both Those actions slow the economy, offsetting the economic benefit of the tax cuts.”
Chris Suellentrop, a writer for the NY Times Magazine, shifts the point of view by showing us this story through the distorted ideological lenses of members of the Kansas legislature and Kansas Governor Sam Brownback. Things look different in Topeka, if you hang out in the halls of a statehouse where conservative Republicans dominate both houses and where Governor Brownback doggedly insists that Kansas’s economic future hinges on a “march to zero” income taxes.
Here is what Suellentrop learns by talking to his uncle, the vice-chair of the Tax Committee in the Kansas House of Representatives: “‘People are leaving Kansas,’ he told me. The state has no mountains and no beaches, and thousands of jobs that were lost during the Great Recession, especially in Wichita’s aircraft industry, never returned. The march to zero, which includes an already-passed provision that exempts the owners of 330,000 businesses and farms in Kansas from income tax, was designed… to turn Kansas into a different sort of tourist attraction. As he and his fellow conservatives see it, it’s an ‘open for business’ sign, one they hope will draw free enterprise to the state, perhaps akin to the way the national debate over the expansion of slavery once drew young abolitionists from New England to the plains. You Get What You Pay For: Taxes and the Public Schools | janresseger: