I compliment Gov. Matt Bevin on his efforts to tackle the pension problem in Kentucky. He is showing true political courage by turning the spotlight entirely onto himself, offering to be the bad guy in Frankfort… and maybe raise taxes?
“I’ll take the heat for it,” Bevin said, “and you can all blame me for it if you’d like. And I’ll say this, there are people who supported me and have supported me that won’t like this: This is not going to be a tax-neutral tax plan. It’s not. We can’t afford for it to be. That’s a straight-up fact. We cannot pay off eight times what we bring in if we simply reshuffle the deck.”
Bevin says he has looked at other states to use them as models to reform our tax code. If this is true, it makes one wonder why he met with the architect of Kansas’ new tax code.
Tax reform has destroyed Kansas’ state budget, killed some key social services and failed to deliver a promise of immediate prosperity.
Kansas relied on an economist named Arthur Laffer, who, not coincidentally, visited Bevin in December. Bevin told the media this was just a social visit from a friend — a friend who joined five other friends to contribute over $225,000 to state House Republican candidates last year. That money helped Bevin’s party take over the House — and it had nothing to do with tax policy.
However, if tax policy came up in this “social visit,” I hope Bevin asked his friend what the hell happened in Kansas. Since Kansas’ tax cuts took effect in 2013, employment in Kansas has lagged behind national growth by two-thirds, the state’s economic output has grown less than half as fast as the rest of the country’s, its bond rating was lowered twice and its economic growth over the last two years led to only an additional $30 million, while the revenues lost from the tax cuts were in the area of $700 million.
In all, when Kansas’ state Legislature came into session this year, it faced a $320 million deficit and projects to see a $500 million deficit next year. And because of tax cuts, which overwhelmingly favored wealthier Kansans, lawmakers are now having to cut vital social services, including funding for early-childhood education and meals-on-wheels for seniors and the disabled.
They also have tried to make up for the budget crisis with sales taxes. Quick review: Increasing sales taxes means a tax on the poor — at least disproportionately — because now you’re taxing such items as groceries. And the poor have to spend a greater percentage of their money on these goods than a wealthier person… who pays the same grocery tax, but still has thousands or millions to save or spend elsewhere.
In short, a sales tax is a grocery tax. It’s a tax that kills poor people and is hardly acknowledged by the wealthier Whole Foods shopper.
So, Gov. Bevin says he wants to look at what has not worked: tax cuts, sales taxes and, your buddy, Art Laffer.
Then, what should Kentucky do?
If we have to raise revenue, and meet our obligations, we must attract workers and businesses.
Well, what do we have that’s attractive? We could start by growing and selling our way out of this… see: legalize marijuana. It would, uh… spark up an economic boon and save money now spent imprisoning people who smoke a joint.
Kentucky has land and agriculture. The University of Kentucky should be the world leader in research and development of agriculture. We could become the global center for training farmers of the future.
Most important to boosting our economy is offering a good quality of life — what Kansas is now realizing it can’t afford to do. This means quality infrastructure and spending on good schools, safe streets and the environment.
Finally, don’t be a regressive state. Don’t give millions in tax breaks to an alleged tourist attraction that offers false history.
Acknowledge the civil rights of minorities just as much as the religious rights of others. Work to build strong union partnerships, not rip unions apart.
We have plenty to offer. We don’t need to bribe people with tax cuts and the good ol’ days.