Exciting news coming out of Topeka this week, as a panel of economists have determined that through 2016, Kansas is expected to have nearly a billion dollar shortfall. Naturally, Democrats are dancing in the streets declaring this to be evidence of Brownback’s epic failure in tax policy. Administration Republicans are stoically optimistic, confident that good times are coming, and in the mean time see being forced to scale back as A Good Thing™. “Living within our means,” they call it. The reality is, the Republicans are more right than wrong in the matter. The budget isn’t nearly so simple as “fire bad, tree pretty.”
They certainly are far from right though, too. The trick is in how we, as a state, find opportunity in the position we are in. One of the important lessons in Buddhism is the idea that good and bad are very fluid, relative concepts. The worst event in your life can simultaneously be the catalyst for the best. Being put under financial stress gives us a great opportunity to do work that we otherwise don’t (or won’t) do when our budget is flush. Rather than making a mockery of Brownback’s failings in this area, or complaining about how hard the next four years will be, Democrats should be focusing on how to find success strategies within the scaffolding available. If Brownback and company truly fail Kansas, we’re all hurt by it. That leaves only room for constructive countermoves, not criticism and vitriol. As a result, my patience for the “Brownback is destroying Kansas” troupe is somewhat limited. Complain less, do more.
“Failure” is a very interesting word. A simple Google search will get you results that are altogether damning of our situation. And there’s certainly no denying the drop in revenue. But, there’s also not a lot of commentary on just where we go to do better from this point. For instance, how about we consider the fact that unemployment is down, and population is up – both good things. Arguably, correlation and causation must be considered here, and there’s no way to singularly link these patterns to the tax cuts in lieu of the overall national trend, which we mirror pretty well (and have historically always mirrored). So one could say we’ve enjoyed some of that success in spite of the cuts. But, those metrics imply opportunity, regardless of the cause. So, are we failing?
Well, by the measure of some of the early estimates for the plan, yes. They were, arguably, far too optimistic, and far too inaccurate. But that’s something Steven Anderson (Kansas budget director) himself admitted at the time – that you cannot realistically create five-year forecasts that are right by anything more than dumb luck. And he’s absolutely correct. By year five, you’re just guessing. Where Brownback made the big mistake was in planning policy based on that outlook despite knowing it was almost certainly inaccurate. Instead, he made a judgement call based on his faith in the principle, despite the evidence to the contrary (in political terms, this is characteristic of what Philip Tetlock calls a “hedgehog”). Probably the biggest mistake was that the projection he used relied on a dynamic model – which is to say the estimates themselves relied on assumptions about what would happen as a result of the cuts – variables that themselves depended on variables. Normally, economists stick to static models for such projections. So by that measuring stick, we have failed to produce the outcome that was predicted, and the rational reaction would be for the legislature to reconsider the plans in that light.
But are we failing? Failing would be exhibiting an inability to react accordingly to the conditions being presented, regardless of their original intent. We’re likely to face some inevitable things soon – cutting spending, eliminating programs, finding new revenue streams. In my mind, failure would be us not doing these things despite knowing we have to. Failure is not having less money in the state coffers to work with. That’s just a condition to deal with. But even folks close to Brownback have acknowledged that while they’re going to stick the course, they’re willing to adjust the trajectory a little to help buffer the finances (e.g. stretch out or make the cuts more shallow than planned). That’s good, because it means there’s willingness to learn from the present conditions. State Democrats should be falling over themselves for the opportunity to preach local level empowerment right now. It’s a tremendous leadership opportunity and chance to showcase adaptability and fiscal responsibility, two areas they are frequently criticized for.
For instance, this “living within our means” line we’ve been hearing isn’t just a line. It’s a statement of fact. The tax cuts are here. They’re going to stick around. So the reality of our situation is figuring out how to get the most out of our money in Topeka. And we undoubtedly will do just that. Painfully, but it will happen. The state legislature won’t just go lean, it’ll get downright anemic. We can’t just revert everything, that would only shock the system, and would most certainly hurt the lower-class far more than they may or may not be experiencing now. Instead, we focus on what we can do, and can do well with what’s available. When you buckle down and go lean, there isn’t a lot of room for getting playful. Ask your grandparents about what getting lean meant during the Great Depression some time.
Consider this. Schools aren’t going to vanish. Colleges won’t shut their doors. Road construction won’t cease. These things will no doubt be affected, of course, but our core services won’t themselves disappear all together. And the legislature will be punished. Less money means less power as they have fewer means to enforce their will across the state. That’s not all together bad. Folks have been quick to point out things like property taxes going up to offset the effects of the cuts, but again, that’s money that’s staying in your region then. Your property tax dollars going to your schools. And while no one wants to pay more property tax, you’re paying less income and sales tax (not necessarily saying that those balance out, but it’s likely close). Taxes are tricky like that.
Trickle down economics is a myth. And likewise, more money at the top levels of government doesn’t necessarily benefit us at the local level. Every dollar that leaves your wallet and goes to the government only to come back, always comes back smaller. The further away it goes – local, county, state, federal – the less of it comes back. The less money leaving our region, the more we are empowered locally and arguably the more we can do than before. That’s a powerful opportunity to improve where we’re at while sending a message that Topeka’s failure changes the balance of power, and that now they’ll have to re-earn our trust if they want it back. So in the end, the more Topeka falls behind, the bigger the opportunity is for new, creative, local solutions, which should be an exciting prospect for us.
(Photo Credit: CC by 2.0 – Alan Cleaver)