By Annie McKay, Kansas Center for Economic Growth Executive Director
It’s safe to say that January through the end of March is my favorite time of the year. I grew up in a state rich with tradition of junior college and college basketball, with perennial men’s and women’s powerhouses located throughout Kansas. Kansas is no stranger to greatness, both on the court and off. Personally, I grew up wanting to be Lynette Woodard, the standout from Wichita, but it was pretty obvious my talents would not lend themselves to being a basketball all-star. But hey, budget and tax policy is a really, really close second.
I often think about the challenges Kansas faces through terms or frames that a broader audience can relate to or understand and, in this case, the example for me is college basketball. If Kansas was a team trying to make the tourney there are three serious issues that need to be resolved if we’re to get back to our winning ways:
What it takes to “win the game” is statistically improbable
As we enter into the mayhem of college basketball tournaments and title runs, a very different madness faces policymakers and the Governor – state revenues. A predictable pattern associated with our monthly revenue collections has emerged – repeated failure to meet the estimates that are set. But while we are focused on the month-to-month storyline, there’s a bigger tally to keep in mind – the final total we need to make the budget work.
Unlike college basketball, when it comes to revenue we know what the “final score” needs to be. It is the total revenue mark estimators set in November (total revenue estimates) and what “Team Kansas” has to do to “win the game” (meet or beat the total revenue mark). Looking at Team Kansas’ performance month-to-month shows that we are struggling to hit baskets – both income and sales tax shots are off. We’ve been following that on a monthly basis and proponents responsible for drawing up Kansas’ failed tax plan would have us believe that we’re close to getting back in the game.
Unfortunately, we are a month into the second half of FY2016 and the growing gap that exists appears insurmountable, with the likelihood of coming out on top improbable.
Taking the two keys to Kansas’ game plan – income and sales tax – we know that we have to do the impossible. The chart below highlights what Team Kansas will need to average per month between now and the end of June. It’s like having your two key shooters, who have been turning the ball over and not hitting their shots, suddenly shooting better than they ever have in their careers – beyond what the statistics show they are capable of.
We don’t have a full team
At the end of the day, it’s time for the Governor and policymakers to understand Team Kansas won’t win until we’ve got all the players back on the court. This will require closing the loophole that prevents 330,000 Kansans from paying income tax – a policy passed in 2012 that has kept Kansas from playing without a full team for the last three years, to the detriment of revenues month after month after month.
We’re using a borrowed game plan that won’t work
Borrowing a strategy from another team might work if you have the same players, but the fact of the matter is Kansas will never be a successful “no income tax state,” because we simply are not that kind of “player.” The other teams using the “no income tax” game plan have a wide variety of skills on their team that Kansas will never possess – oil & gas, tourism, etc. – and trying to emulate their approach was a poor strategy from the start.
Proponents of Kansas’ failed tax policy also need to understand an important lesson I learned early in life. When I realized I wouldn’t be Lynette Woodard – try as I might – I stuck to what my strengths were to build success. Kansas too can be successful by utilizing the strengths we have to develop a game plan that makes the most sense for our team.