Welcome to Kansas, the bastion of how not to run a state, but claim things are just dandy. I noted in a prior blog that Kansas has no reserves. And apparently a $350 million deficit in 2016, a continuing trend for a number of years now. And bigger deficits to come. Kansas is the poster child of why cutting taxes a lot does not work.
How did they get here? The state governor and legislature decided that cutting taxes spurs economic growth. So if you cut a lot of taxes, you get lots of growth. They cite the Laffer curve, a totally discredited economic tool drawn on the back of a napkin by Arthur Laffer at a 1974 dinner to argue why Gerald Ford should not raise taxes. On the face of it it makes no sense but that has not stopped supply side politicians from using it for nearly 40 years to cut taxes. The problem, it is wrong.
Cutting taxes does not spur enough economic growth to make up for the loss in taxes when you go down the Kansas role. If you s cut them too much, it is really hard to raise them if you run short. The result is that economic growth in most of Kansas will be stunted for years due to the lack of investment in Kansans. Now you would think that Kansans would be up in arms about the poor stewardship by elected officials. But no. See if you get constant bad news, just stop reporting revenues and deficits. No news is good news right? Welcome to Kansas!