Kansas spending should be cut, not frozen

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By Dave Trabert, Kansas Policy Institute.

A recent Wichita Eagle editorial, “Freeze means big cuts,” said gubernatorial candidate Sam Brownback’s intention to freeze state spending would cause big cuts in services by not replacing federal stimulus money. The unspoken presumptions one must accept to make that leap are (1) every government program and service is essential and (2) every program and service is being provided as efficiently as possible.

Most programs are never examined to determine whether they are effective, and independent efficiency studies are rarely conducted, yet we’re to believe that government could not possibly spend less money without wreaking havoc on taxpayers?

Governments commonly present taxpayers with Soprano-like ultimatums — “either pay higher taxes or surrender necessary services” — as though there are no other options. But there are countless options. For example, eight consecutive studies conducted by Legislative Post Audit found ways schools could operate more efficiently and still meet outcome requirements. State employees pay far less for medical insurance coverage than private sector employees. The state spends millions of dollars on overtime, conference travel, organization dues, advertising campaigns, and in 2009, enough mileage reimbursement to fund twenty-five round trips to the moon!

Government not only can spend a lot less money, it must for the sake of the state’s economic future. Admittedly, that sounds a bit alarmist, but consider the facts.

Private sector jobs increased just 5.2 percent between 1998 and 2008, well below the national average of 7.9 percent and worse than all but one neighboring state. We’ve also lost population due to domestic migration (U.S. residents moving in and out of states), representing 2.5 percent of total population over the last decade and the worst performance in the region. At the same time, our state and local tax burden increased significantly. State and local taxes jumped 59 percent between 1999 and 2009 but income available to pay taxes only increased 38 percent.

Underperforming in job creation and losing on domestic migration while the tax burden rises is not a coincidence; it’s part of a very clear national pattern.

Between 1998 and 2008, the ten states with the lowest combined state and local tax burdens averaged 16.5 percent private job growth and gained 3.8 percent population from domestic migration; the ten states with the highest tax burdens grew jobs by just 6.1 percent and lost 3.3 percent population from domestic migration. Tax burden rankings are provided by the Tax Foundation using FY 2008 data. Kansas was ranked number 21 but is now likely well inside the top twenty, with nearly $500 million in increases just this year between sales, unemployment and property taxes.

Freezing spending might slow the rate of decline but it won’t solve this problem, as our tax burden will continue to grow. Kansas’ overall population is increasing because the birth rate exceeds the death rate, but infants don’t pay taxes; coupled with domestic migration losses, each year sees fewer and fewer taxpayers. The burden on remaining taxpayers goes up, it becomes more expensive to create jobs and the downward spiral continues.

By cutting spending and reducing the tax burden, Kansas can become a state that leads in job creation and attracts population, but only if we’re willing to make the necessary changes.

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