As professionals who have worked in the world of private and public finance for several decades, we are proud of the work that has been done by the state of Kansas over the past six years to get back on track after years of fiscal mismanagement.
If you don’t believe us, just look to the authority on the subject: Credit rating agency S&P recently upgraded Kansas’ credit outlook after four rating and outlook downgrades during the Sam Brownback administration. These changes aren’t made lightly.
It has taken the state six years to get to the point where we are potentially in line for a credit rating upgrade, which could save us millions of dollars in the long term, but only if we stay on track and recommit to the sound fiscal policies that got us here.
With that in mind, we are sounding the alarm about the proposal for a “flat tax” up for debate in the Kansas Legislature that would impose a 4.75 percent tax on all Kansas taxpayers, regardless of their income.
This kind of policy, which disproportionately benefits the wealthy, is reminiscent of the harmful “tax experiment” that wreaked havoc on our economy less than a decade ago.
At that time, proponents of the “tax experiment,” which called for lower income tax rates on the richest Kansans, vowed it would aid our economic recovery after The Great Recession and increase job creation and revenue. Brownback famously promised it would be a “shot of adrenaline right in the heart of the Kansas economy.”
What the experiment actually led to was budget deficits, revenue losses, credit downgrades, and increased taxes on Kansas families.
The first year the “tax experiment” was implemented, we lost $700 million in revenue. By 2017, Kansas had a $280 million deficit. The sales tax was increased multiple times to make up for the lost revenue, forcing our working-class families to foot the bill for the tax experiment’s recklessness. Our state credit rating was downgraded twice.
Thanks to Gov. Laura Kelly’s responsible management of the state budget, not only have we been able to dig ourselves out of the ditch, but we have also been able to pay off state debt and make valuable investments in our future. Kansas even had a $2 billion surplus, allowing for responsible cuts in the food sales tax, which benefits every Kansan.
The flat tax, estimated to cost our state $570 million every year, puts all the progress we’ve made at risk.
Proponents of the flat tax want you to believe it will benefit you, but here’s the truth: the lowest-income Kansans would see an average of $42 in savings per year.
Meanwhile, the wealthiest Kansans would see average savings of over 100 times that amount — more than $5,000 of savings per year.
Not only does the proposal barely move the needle on savings for the average Kansas family, it jeopardizes the eventual elimination of the food sales tax and could lead to further tax increases on low-income and middle-class families.
The last time politicians “experimented” with our economy, we couldn’t fund essential services, we were in debt, and our economy took a major hit.
We’ve come a long way since then, but we cannot allow history to repeat itself by implementing a “flat tax” on Kansans. Jill Docking is senior vice president of The Docking Group, a Wichita investment firm. She served on the Kansas Board of Regents and ran for U.S. Senate and Kansas lieutenant governor. Duane Goossen is a former Kansas secretary of administration and budget director.
