Repealed Legislation
Passed June 7, 2017
Policy Summary
Earlier this June, the Kansas state legislature voted to pass Senate Bill 30, a bill that would override many of the large tax cuts that were championed by Governor Brownback. Governor Brownback attempted to veto the passage of S.B. 30, but was overridden by the legislature in a surprising move by the State senators in his party. The Brownback administration led a series of tax cuts beginning in 2012—but these cuts led to a decline in state revenues so stark that the state budget was facing a $900 million deficit. The new taxes introduced by S.B. 30 will raise $1.2 billion, revenue that the state plans to use towards bolstering K-12 education.
Analysis
Kansas’ Senate Bill 30 has been held up as an example for conservative lawmakers across the country—state conservatives were not afraid to reverse their previous anti-tax policies once they realized how much the tax cuts were hurting the state. The 2012 Kansas tax cuts led to a state budget crisis that led Kansas to cut services and was thought to be responsible for the state’s declining job and economic growth. As a result, the state’s bond credit rating was also downgraded—compromising the state’s ability to borrow funds and further complicating the state’s fiscal standing. The tax cuts also likely increased tax avoidance in the state, further exacerbating Kansas’ budget shortfall.
Kansas’ 2012 tax cuts—now repealed by SB 30—have been described as “Exhibit A” in how not to pass tax legislation. Unfortunately, Kansas’ model was used as a blueprint for the GOP’s national tax plan—a plan that may soon be passed as part of the efforts to “repeal and replace” the Affordable Care Act. The House bill included tax cuts of roughly $765 billion over the next decade. The decrease in revenue would be made up by making drastic cuts to Medicaid and Medicare (read more USRESIST NEWS coverage about Health Care).
The Tax Policy Center, a non-partisan, non-profit think tank, found in an analysis that proposed Republican tax cuts would reduce economic growth and add $3.7 trillion to the country’s debt in the next year. Economists fear that a national bill would result in an even worse version of Kansas’ budget woes—and lead to dire consequences for the economy as well (read more here and here about the effect of these tax plans on jobs).
In the Senate, political pressures—including from moderate Republicans—led analysts to believe that the Senate bill would have fewer tax cuts. But the Senate bill, finally publicized late in June, includes nearly as much in tax cuts as the House bill. Voting on the bill has been delayed, but only time will tell what the ultimate health care bill looks like—and how deep its cuts will be.
Engagement Resources
- Call your Senators to voice your thoughts and feelings about the health care bill and its potentially dangerous tax cuts.
- Check the Center for Budget and Policy Priorities for research and briefs about proposed tax policy in the United States.
- Use the resources at org to see what your state legislatures’ recent actions on state budgets—especially their recent coverage of state budget conflicts.
