By Steve Haynes, Nor’West Newspapers
From the dark days of a decade ago, when the bottom had fallen out of the Kansas economy, the governor had just slashed taxes and the state was perennially broke, to the salad days of Covid recovery: now Kansas is sittin’ on a big ol’ pile of cash.
Just wait until the fightin’ breaks out.
The state ended last year with a $2 billion surplus and already this year projects to collect $1.3 billion more than expected from state taxes alone, 17 percent over projections.
And that kind of money will bring out all the forces of spending. They will have plans to spend every last dollar. Every cent.
By the time the current legislative session is over, we predict, it will look like a flock of buzzards moved in and picked the carcass of that cash over clean. Not a spec will be left, not if the spenders get their way. And nothing attracts the spenders like the sound of cash rolling in.
Many years, the session is all about how to dole out the meager few dollars left after the state pays for schools and welfare. Even state colleges have trouble cadging a dime here and there.
And this is windfall cash, money no one expected the state to have. It’s like winning the lottery or inheriting a fortune, almost too good to be true.
But don’t worry. The gang in Topeka has handled things like this before. They know how to spend money. If we don’t watch it, the whole pile will be gone by the end of the year.
The governor, her likely Republican opponent and legislative leaders have been falling all over each other declaring that the state’s sales tax on groceries must go. That’s a noble idea, but it’s the wrong kind of spending for a windfall.
Why? Eliminating the grocery tax will cost something like $450 million a year, pretty much forever.
And while the surplus is likely a one-shot deal – it could disappear overnight if the economy goes south again – tax cuts are forever. When surpluses turn to revenue deficits again, as they surely will, how will the state pay its bills?
It’s just a lot easier to spend cash than it is to plan a budget that will survive the next downturn.
Not that eliminating the tax on groceries isn’t a good idea. We’ve already seen that everyone agrees on that. But as Sam Brownback learned, the reverse of the seemingly endless prosperity we see today might be only a few months away.
So be careful.
Why not spend this money in ways that will help the state when a downturn comes: pay off debt, strengthen the structure, fix up buildings and roads with one-shot projects that can be cut back next year or the year after?
When times were tough, the state got by on borrowing money with road bonds, then diverting it to maintain operations. Now we should pay off some of those bonds so we won’t have to pay them later. Build roads and fix buildings with surplus cash and federal dollars.
If we look around, we could find more ways to invest this money in the state’s future. If we give in to spending it on new programs, there’ll be no way to sustain them come the next recession.
That’s probably way too sensible, but why not be sensible? You don’t see a pile of cash like this every day, after all.
Editor’s note: Steve Haynes is owner and publisher of Nor’West Newspapers based in Oberlin.