Kansas experiment
[16] Brownback compared his tax policies with those of Ronald Reagan, and described them as "a real live experiment",[17] which would be a "shot of adrenaline into the heart of the Kansas economy",[18] and predicted that by 2020 they would have created an additional 23,000 jobs.
[3] However, economic growth was consistently below average during the experiment,[4] and by 2017, state revenues had fallen by hundreds of millions of dollars,[19] causing spending on roads, bridges, and education to be slashed.
[24]: 1 As a conservative Republican Senator from Kansas, Brownback had been reelected by large margins in 1998 and 2004, and had also run briefly for president in 2008, withdrawing before the primaries began.
[30] Some Kansans interviewed by a journalist and Burdett Loomis, a political scientist at the University of Kansas, speculated that Brownback hoped that, after his failed first attempt in 2008, the success of the tax cuts would help launch another campaign for the presidency.
[32] As the bill was signed, predictions were made by supporters for an economic revival in Kansas, and by opponents for an unparalleled budget crisis.
[2][33] His administration projected the creation of 23,000 jobs a year in Kansas in addition to those created by natural economic growth.
[3][34] After signing the bill, Brownback argued that the cuts would pay for themselves through the increased revenue resulting from boosting the state's economic growth.
[14] Supporters pointed to projections from the conservative Kansas Policy Institute predicting that the bill would lead to a US$323 million increase in tax revenue.
[35] Less supportive was a forecast from the Legislature's research staff indicating that a budget shortfall would emerge by 2014 and grow to nearly US$2.5 billion by July 2018.
[16] In June 2012, Brownback stated on MSNBC show Morning Joe, "On taxes, you need to get your overall rates down, and you need to get your social manipulation out of it, in my estimation, to create growth.
[2][6] The Washington Post and Michael Hiltzik, a reporter for the Los Angeles Times,[37] warned that job creation and economic growth in Kansas were lagging those of its neighboring states.
"[13] By early 2017, Kansas had "nine rounds of budget cuts over four years, three credit downgrades, missed state payments", and what The Atlantic called "an ongoing atmosphere of fiscal crisis".
[21] To make up the budget shortfall, lawmakers tapped into state reserves set aside for future spending, postponed construction projects and pension contributions, and cut Medicaid benefits.
[2] In addition to budget problems, Kansas was lagging behind neighboring states with similar economies in "nearly every major category: job creation, unemployment, gross domestic product, taxes collected".
[46] Earlier efforts to close budget gaps had left Kansas "well below national averages" in a wide range of public services from K-12 education to housing to police and fire protection.
[49] This first transfer of funds had already caused the Kansas Department of Transportation to "indefinitely delay" two dozen road expansion projects in April 2016.
[4] [Note 4] In 2014, Brownback ran for reelection, challenged by Paul Davis, the Democratic minority leader of the Kansas House of Representatives.
[67][68] Two years later "a wave of moderate Republicans" opposed to the tax cuts replaced many of the conservative supporters of the experiment in the state legislature.
[22] The Kansas Supreme Court had ordered the state legislature "to increase funding for public schools by US$293 million over the next two years".
[4] A repeal of the tax cut was attempted in February 2017 by a coalition of Democrats and newly elected centrist Republicans, who passed legislation (Senate Bill number 30 or SB 30) to raise income-tax rates and eliminate an exemption for small businesses.
[81][82] In the 2018 Kansas gubernatorial election, the Republican candidate, conservative Kris Kobach, promised to "try to roll back the tax hikes" of the 2017 legislative session, and urged a return to "a more low-tax structure like we had from 2013 to 2016" during the Brownback administration.
[88] According to critical observers, part of the reason for the large revenue loss was that the new 0% tax rate on pass-through business income was "exploited" and had "become a loophole" for taxpayers.
[2][23] Instead of 200,000 small businesses taking advantage of it, about 330,000 entities used the rule;[23] among them were large limited liability law firms and oil exploration companies.
The Wall Street Journal called the repeal the work in part of "unions getting even with the Governor over his education reforms, which included making it easier to fire bad teachers".
[95] It also defended the tax cuts by citing a low unemployment rate, which was 3.7% as of June 2017, and "considerable small-business formation" in Kansas.
