Black ink at last

Valley Voice

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Amidst all the political caterwauling, a look at the state’s finances may advance some sense and understanding before the election. If only a peek, it helps to know how we’re doing.
Early this month the Kansas Department of Revenue reported that the state’s tax revenues at the end of September were at $961 million, an increase of $84 million over first-quarter revenues a year ago.
At the same time, Gov. Laura Kelly reported that the administration had saved taxpayers more than $750 million by paying cash for various state projects and by retiring early the remaining half of $200 million in highway bonds; this saves the state more than $22 million in interest payments.
The 20-year bonds were issued 10 years ago. The legislature approved an early payoff of $98 million last session, the first time that the state had paid a bond issue before it was due.
This is a remarkable change from four years ago, when the ledgers were stained red. Kansas bond ratings had been downgraded three times; the state had become a credit risk.
The Brownback-Colyer administration had wrecked the treasury with years of budget deficits. Repeated tax cuts for corporations and wealthy individuals brought years of declining revenue. State aid for local schools was slashed. Local taxes increased. Budget deficits approached $1 billion. State debt soared. Sales taxes and user fees increased by $300 million. Assaults on Medicaid and state hospitals and ceaseless raids on state highway funds were used to backfill deficit spending.
Today, black ink. This has been the pattern for three years.
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The state’s budget year begins July 1. A report for the first quarter ending September 30 showed $2.2 billion in tax receipts. This is $92 million (4.4 percent) above revenue for last year’s first quarter.
Other notes:
Individual income taxes for the period, mostly withholding, were $441 million, up 8.5 percent ($34.5 million). Corporate income taxes were $170 million, up 17 percent ($24.9 million).
Sales taxes for the quarter were $245.7 million, up 9.1 percent ($20.5 million). Compensating use taxes (on out-of-state sales) were up 5.1 percent ($3 million).
Other excise taxes were $26.6 million, up 7.6 percent ($1.9 million).
Cigarette taxes were $8.5 million, down 10.2 percent ($969,000) from the first quarter a year ago.
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Over the last budget year – July ’21 through June ’22 – the Kelly administration acquired enough budget surplus to retire debt early and pay cash for projects rather than borrow by issuing bonds.
Prudent conservative management allowed the government to retire $1.6 billion in debt and save $632 million in interest payments. Plans are to pay cash for another $203 million in new capital projects. This should save more than $100 million in interest that would otherwise have accumulated with bond-borrowing.
A budget surplus of nearly $1 billion has allowed the government to pay down a stunning level of debt and, at the same time, continue to build reserves.
This should insulate the state budget from volatile economic times, said Budget Director Adam Proffitt. “It will provide fiscal stability allowing us to continue to fund critical services for Kansans for years to come.”
It’s a stunning change after the dark Brownback years of his disastrous “Glide Path to Zero” income taxes. His trickle-down evaporated. As revenues dried up, budgets for local schools, state universities, colleges and even the Highway Patrol were savaged. Spending was fueled by budget raids on such fee-supported agencies as the insurance department and wildlife and parks. The highway fund was looted repeatedly. Brownback borrowed with $1.5 billion in bonds to cover a raid on the public employee retirement fund. The state’s credit rating plunged as the treasury began to run dry.
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In 2016 the courts intervened and voters spoke. The Supreme Court ordered local schools to be funded “adequately” according to constitutional directive. Voters elected legislators who had sense enough to begin a realignment. A year later Brownback was hounded from office and assigned by Trump as a “religious ambassador” to preach the word to the planet’s unwashed multitudes. His acolyte, lieutenant governor Jeff Colyer, took over for the final withering year of Brownback’s second term.
In 2019, Laura Kelly. Finances improved despite headwinds of legislative intolerance. Budgets recovered, subduing the tired dogma of tax cuts and less government, of borrow-and-spend and ignoring red ink.
This advance comes from a belief in better government, not less government. A healthy budget is the product of enlightened government. A strong treasury comes by an informed government. It pokes through the deceits of slash and spend. It refutes the tattered Republican gospel of borrow and backfill.

 

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