By: Tate Mullen, Government Relations Director, Wyoming Education Association
In 2012, Kansas Governor Sam Brownback signed one of the most extensive tax cuts the state had ever seen. This legislation promised to act “like a shot of adrenaline into the heart of the Kansas economy” by cutting all taxes on business income and cutting individual income tax. Brownback termed this legislation the “march to zero,” an attempt to eliminate state income tax. What transpired was one of the worst economic crises the state has ever experienced.
While the cost for service provision, such as education, continued to rise with inflation and population growth, the state’s revenues fell by $700 million in the first year. State spending was substantially reduced, and the state’s bonds were downgraded by two major bond rating agencies, making infrastructure investments and projects almost prohibitively expensive. School funding fell to such low levels that the state’s Supreme Court, in a case not unlike the Campbell cases in Wyoming, stated that schools were unconstitutionally underfunded. Businesses shuttered, poverty rates climbed, food insecurity was on the rise and those who could afford to move abandoned the state.
Last year, Kansas was named the “comeback state of 2019” by CNBC’s America’s Top States for Business rankings. However, this comeback took time. It required the diligent work of dedicated professionals and a change of governors for the state to begin its recovery.
The first step toward recovery was to stop the revenue bleeding. Tax cuts became a thing of the past. Voters elected lawmakers in 2016 who were not averse to tax increases and rolled back the Brownback tax cuts on June 6th, 2017. The state recognized that a comprehensive approach was needed to address its revenue issues. The state implemented an income tax, increased sales tax, and implemented a food tax, amongst other revenue-generating policies.
Though Wyoming’s drastic revenue decrease is not the result of cuts to income and sales tax in the state, the issues we face echo those that plagued Kansas after the Brownback cuts. Wyoming’s precipitous decline results from a combination of faulty policy measures, including relying on declining industries and the failure to utilize taxes as a means to increase revenue alongside the state’s efforts to diversify Wyoming’s economy effectively. Regardless, the issues faced by both states are similar.
While the Brownback tax cuts enacted in 2012 lost over $700 million in revenue the first year, it wasn’t until 2017 that the state legislature decided to repeal these disastrous cuts. Over those five years, Kansas witnessed a detrimental decline that saw businesses shutter, families broken apart, poverty rampant, education unconstitutionally underfunded, and a mass exodus that left the state reeling.
Wyoming cannot wait five years. We cannot underfund education. We cannot raise our poverty rates, and we cannot, through policy, hurt or endanger low-income and middle-class families. The state of Wyoming cannot wait five years to raise revenue through taxation. The citizens of Wyoming and its state leaders need to realize that the myth of low taxes incentivizing business is faulty and a blatant lie that hurts the citizens of this great state.
Wyoming cannot further reduce access to services for those most impacted by our current financial crisis. Doing so will imperil the livelihood—and even the lives—of those citizens most in need, including the elderly, disabled, and children. Wyoming has a long road ahead, but we can learn from case studies like Kansas. Kansas faced the dire situations now threatening Wyoming and emerged as a community able to provide essential services and the chance for prosperity its citizens deserve. Now it’s our turn; Wyoming citizens deserve nothing less.
Tate Mullen is the Government Relations Director for the Wyoming Education Association. Prior to joining WEA, he worked as a policy and research analyst for Kansas Action for Children in Topeka, Kansas, where he collaborated with state legislators, national partner organizations, and other statewide non-profits on policies aimed at improving the lives of children and families across the state.