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In a March 10 interview on Fox, Governor Brownback told the nation about the wonders that were taking place in Kansas.   He cited the reduction of taxes in Kansas as being key to helping the economic engine continue to run.

Brownback discusses how Kansas tax plan and continued tax reduction would help the Kansas economy grow.

Why Just last Fall, Forbes Magazine called Brownbacks plan a way to 'take the region to school'

I am sitting atop a limestone bluff overlooking the Osage River at my home in Folk, Missouri, and it seems as if the only way to get Congress to reform this country’s tax code is to ask for an intervention by the Great and Powerful Oz. But, here in the nation’s heartland, results from an experiment in state income tax policy just might provide other states with a roadmap to real growth.

You may recall from a past Forbes column by me that laid out the landmark legislation signed into law one year ago by the forward thinking Kansas Governor Sam Brownback.  Brownback’s tax plan flattened and simplified the tax code, cut personal income tax rates for most earners from 6.45% to 4.9%, and got rid of small business income taxes.

Why, Kansas economy is humming like a bird according to Forbes!  Job Creation!  Tax Growth!  The state could be rolling in money!

So, you have to imagine some of the shock and dismay Republicans feel today as the sales tax returns start showing that for all the praise they might be wrong.

So, when the May 1 report on Sales & Income tax returns came in, someone should have been surprised:

TOPEKA — Tax revenue in April dropped 45 percent from a year ago, the Kansas Department of Revenue announced Wednesday.

The state’s revenue for the year is $92.9 million less than projected earlier this month.

The unexpected news weighed heavily on a joint committee of senators and House members who worked late into the night, trying to hammer out a budget in a wrap-up session that started Wednesday.

“It’s certainly impacting decisions. I mean any decision that would have included more spending is out the window obviously,” said Sen. Ty Masterson, R-Andover.

The state has taken in $480 million less overall than it had by this point in the last fiscal year.

The governor and other Republican leaders attributed the April drop to federal tax changes. Democrats called that claim ridiculous and said the revenue numbers showed the governor’s tax cuts are unsustainable.

That's right.   Kansas is on track for a nearly 1.3B tax shortfall this year, and in April we endured an unprecedented income drop of over 45%.  That's right.  The state economy lost 45% of its tax income.

But maybe Kansas isn't the only state experiencing the problem.  Maybe it's the whole region.

The downgrade reflects Kansas' relatively sluggish recovery compared with its peers, the use of non-recurring measures to balance the budget, revenue reductions (resulting from tax cuts)
which have not been fully offset by recurring spending cuts, and an underfunded retirement system for which the state is not making actuarially required contributions. In recent years the state has appropriated funds from or shifted costs to the State Highway Fund to help balance the general fund budget. The phasing in of increasing income tax cuts, along with rising pension costs, will continue to exert pressure on the budget.
Whoops.  Kansas job revenue market grew at a slower rate then nearby states (like Missouri) and Kansas revenue estimates led to Moodys downgrading state bonds, increasing the cost to borrow.

Despite the analysis from outside agencies that other states are performing significantly better than Kansas in equal economic situations and that Kansas tax policy led to the downgrade of Kansas Debt, Governor Brownback issued this statement today:

“What we are seeing today is the effect of tax increases implemented by the Obama administration that resulted in lower income tax payments and a depressed business environment,” Gov. Sam Brownback said in a statement.
Read more here:

Apparently, Obama's policies just want to hurt Kansas more than ... anywhere else I suppose.   We just must be in that Obama is out to get us vortex for Moody to make the analysis that others are not suffering this kind of economic crater effect.

Kansas Republicans have a plan for this though.   Today, they began debating ending the Mortgage Filing Fee, a tax of .26 cents for every 100 dollars financed that goes back to county offices to use for emergency funds.

Because we all know, with a drop of 45% in expected revenue, there is no way they will ever need emergency funds for basic services.

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