Do voters still like tax cuts? The curious case of the Kansas governor's race.
| Washington
Sometimes tax cuts don鈥檛 drive an economy forward.
That鈥檚 the challenge that Kansas seems to be facing, and it鈥檚 a key reason a Republican governor faces an arduous reelection battle in a heavily Republican state.
Sam Brownback was elected in 2010, slashed taxes on state residents, and now faces criticism for damaging the state鈥檚 fiscal health rather than rejuvenating its economy.
In one video ad, rival gubernatorial candidate Paul Davis (D) speaks to the camera from a car that鈥檚 being driven in reverse down a farm-country road 鈥� a symbol, Mr. Davis says, of the state鈥檚 directional course. He cites slow job growth, cuts in the education budget, and credit-rating downgrades as the fruits of Governor Brownback鈥檚 policies.
Polls show Brownback essentially tied with Davis, a statehouse legislative leader, heading into Tuesday鈥檚 vote.
Although tax cuts are hardly the only issue in the race, the outcome will be viewed partly as a referendum on Brownback鈥檚 brand of 鈥渟upply-side鈥� economics, the longstanding penchant of conservatives to view lower taxes as a sure-fire catalyst for private-sector investment, consumer spending, and job growth.
Brownback says his policies are working. His website touts 55,000 private sector jobs created and $4 billion that tax cuts have left in the pockets of Kansas families and businesses.
The state does have low unemployment (4.8 percent of the work force as of September), as do other Plains states.
And Brownback says the credit downgrades, from firms like Standard & Poor鈥檚, don鈥檛 mean the state鈥檚 finances are falling into ruin.
What鈥檚 clear, though, is that many Kansans, including some in his own party, don鈥檛 like the road he鈥檚 chosen. In one ad Davis boasts the support of 500 鈥淩epublican state leaders,鈥� along with teachers and state troopers.
In August, Standard & Poor鈥檚 cited the weak outlook for state tax revenue in downgrading the state鈥檚 bond rating. The move 鈥渞eflects our belief that there will be additional budget pressure as income tax cuts scheduled in future years go into effect,鈥� the firm warned.
All this doesn鈥檛 mean that tax rates don鈥檛 matter for economic growth, or that there aren鈥檛 occasions when policymakers can simultaneously cut taxes and bring in needed revenue. Whichever side of the debate you鈥檙e on, it鈥檚 probably unfair to make too much of Kansas under Brownback as a case study.
But critics say it does offer a cautionary tale.
The left-leaning Center on Budget and Policy Priorities, in , argued that Brownback鈥檚 tax cuts have mainly benefited the wealthiest households while eating a hole in a budget that the Kansans rely on for school funding and other needs.
鈥淪ince the tax cuts took effect at the beginning of 2013, Kansas has added jobs at a pace modestly slower than the country as a whole,鈥� said the report, written by Michael Leachman and Chris Mai. 鈥淭he earnings and incomes of Kansans have performed slightly worse than the U.S. as a whole as well.鈥�
They said farmers reaped income gains as the state recovered from a drought.
William Gale, a Brookings Institution economist, 鈥渕ay raise economic growth, but there are many stumbling blocks along the way and no guarantee that all tax changes will improve economic performance.鈥�
In the research, with a focus especially on federal rather than state policy, Mr. Gale and 鈥媏conomist鈥� Andrew Samwick 鈥媜f Dartmouth College鈥� warn that economic gains can be hard to come by when tax cuts are paid for by borrowing.That鈥檚 not an option for Kansas, which like most states has balanced-budget requirements. But it has been an option for the federal government. And it鈥檚 an outside-of-Kansas bit of cautionary advice for Americans to consider.
