It’s Like Déjà Vu All Over Again (A Blog by the Kansas Center for Economic Growth)

October 15, 2015

The late baseball icon Yogi Berra once said “It’s like déjà vu all over again”, playing on the French phrase meaning “already seen”. While he wasn’t prophetic and referring to shrinking state revenues at the time, as much could be said about monthly collections in Kansas following the unprecedented tax policy changes of 2012, 2013 and again in 2015. Since lowering the revenue estimates in April, Kansas has failed to surpass the monthly target. To keep our schools open, roads in good shape, and our communities safe and healthy, Kansas needs a predictable revenue stream to support a budget that provides reasonable, adequate support to these services that businesses and families alike rely upon.

The state income tax accounted for 50 percent of Kansas revenues when 2012 tax changes were enacted. It’s not surprising that setting Kansas on a path to eliminate personal income taxes resulted in an immediate and perpetual budget crisis. Month after month, Kansas fails to bring in as much revenue as originally planned. After exhausting a nearly $1 billion surplus in 2013 and 2014, lawmakers promised that the largest tax hike in Kansas history – enacted in 2015 – would finally stop the backsliding. Unfortunately, the same story continues to play out every four weeks. Three months into Fiscal Year 2016 and Kansas has yet to meet monthly revenue expectations.

In September, things got even worse. Revenue collections dipped $32 million below what we expected and built our budget around.  This is significant for a state that already made $63 million in cuts, sweeps, and transfers less than two months earlier just to keep the budget from falling into the red.

Supporters of the tax plan continue to find new excuses for monthly misses, promising better performance over time. But after missing tax revenue estimates 11 times in the last 12 months, it’s starting to seem a bit like déjà vu all over again.

The truth is Kansas keeps missing the mark because the tax changes are so deep.  The graph above shows clearly that this isn’t just a matter of tightening our belt until things get better – this is the unwelcome new normal.

There’s plenty of room for some outside context, too.  Kansas has been dealing with ongoing financial problems since the tax changes went into full effect, but how are other states doing?

The quick answer is that other states near us are doing just fine.  The downward trend on the graph is natural as income tax revenues dipped from the Recession and climbed back during recovery.  Kansas, on the other hand, was seeing income tax collections grow…and then the tax changes went into effect.  Notice how the decline is steep and rapid – that’s the tax changes putting the state into financial jeopardy.

Until the underlying problem of deep, unaffordable and extreme tax changes are addressed, the unpredictable nature of revenues will likely remain. Even after additional changes were made this past legislative session, in an attempt to right the revenue ship, personal income taxes still aren’t recovering.  Kansas is still in the red. And until the problem is fixed, we’ll see more problems crop up.  Hospital closures because the state won’t chip in the small amount to expand Medicaid; negative credit warnings from credit ratings agencies who think the block grants to schools don’t work. Budget gimmicks to shake all of the loose change from the couch cushions to help offset damaging revenue losses from unaffordable tax changes.

While other states are afforded the opportunity to reinvest in their economic drivers – like workforce development through education, bridges and roads to support businesses moving inventory across the state – Kansas has continued to lurch from month to month, hoping the revenue miss won’t be that bad. That’s the heart of the matter, too. At the same time neighboring states get the opportunity to plan for the future, Kansas will continue to live out the same fiscal crisis month after month, leaving little predictability for the short or long term.

- See more at: http://realprosperityks.com/its-like-deja-vu-all-over-again/#sthash.16o1lZaS.dpuf

KASB Blogs on the State Board of Education

State Board designates 5 types of teaching position
categories as "hard-to-fill" positions

The Kansas State
Board of Education on Tuesday designated five types of teaching position
categories as “hard-to-fill” positions.

Those designated were
English language and literature for middle school and high school; science for
middle school and high school; elementary school teacher; mathematics for
middle school and high school and fine arts.

The designation means
school districts can rehire retired teachers for those positions, in accordance
with a new law affecting the Kansas Public Employees Retirement System.

The “working after
retirement” law requires schools to pay a surcharge into KPERS to do the
hiring. The “hard to fill positions” designation will be in effect the next
school year.

Education Board
Chairman Jim McNiece said the intent of the law “was to limit retirees coming
back to schools.”

The Kansas State
Department of Education had originally proposed five more narrow teacher
categories as the “hard to fill” positions.

Picking broader
categories will provide more flexibility to school districts, education board
members said. There were 317 unfilled teacher positions in Kansas as of Sept.
1, according to the state education department. 

New vision for schools: Kansas Leads
the World in the Success of Each Student

The State
Board of Education on Wednesday endorsed a visioning statement that says:
"Kansas leads the world in the success of each student."

The statement was chosen by a landslide
of voters during recent presentations across the state over the past few weeks
by Kansas Education Commissioner Randy Watson.

The two options were:

"Kansas leads the world in student
success." That received 83 votes or 19 percent of the vote.

"Kansas leads the world in the
success of each student." That received 481 votes or 81 percent.

The statement will be used as the
Kansas State Department of Education and State Board of Education release a
visioning plan based on what Kansans said during a recent listening tour. That
release is scheduled Tue. Oct. 27 during KSDE's annual conference in Wichita.

During that listening tour, Kansans
said more emphasis is needed on so-called soft skills, such as
conscientiousness, for students to succeed in college and the workforce.

The re-focus could require more
emphasis on individual plans of study for each student, improving school
climate, getting more engagement from parents and businesses and a larger role
for community service.

Commissioner Watson said at some point
policymakers will have to talk about how to fund the vision, but at this point
it was necessary to get stakeholders to agree on a direction for public
education.

On Wednesday, the Education Board also
started picking outcomes and indicators for the education vision. That process
will continue.

Outcomes agreed upon so far include
kindergarten readiness, graduate rates, percent of students completing a
credential or pursuing post secondary education, percent of students who need
remedial coursework when they attend post secondary, and percent of student
with an individual plan of study focused on career interest. And indicators
that were chosen was measuring social and emotional factors.

Several members of State Board
expressed unease proposed accreditation system

Several
members of the Kansas State Board of Education on Tuesday expressed unease with
progress the Kansas State Department of Education is making on a new
accreditation system.

Education Board Member Ken Willard said
he felt the proposed system to accredit districts was becoming too complex.
Board members Steve Roberts and Janet Waugh also voiced misgivings.

Assistant Education Commissioner Brad
Neuenswander said the department has been careful to go slow during the
process, which started five years ago, to replace the current system called
Quality Performance Accreditation. He said once implemented, the new system
shouldn’t create any new work for school districts.

Education Board Member Jim Porter said,
“I’m excited about this. We are going to measure the right things.”

“Accreditation is one of our core
responsibilities,” said Education Board Chairman Jim McNiece.

Schools at crossroads of revenue problems, litigation and finance debate as KASB concludes summits

KASB concluded its “Success Across Kansas” Fall Summits on Thursday after having met with hundreds of educators and advocates across the state during a key period for public schools.

The purpose of the summits was to share information about school finance in Kansas and a number of other states, discuss the future of education in Kansas and how to energize the public in this conversation.

“We are going for the moonshot,” said Dr. Brian Jordan, KASB’s assistant executive director of leadership services, who cited President Kennedy’s call in 1961 for the United States to put a man on the moon before the end of the decade.

“We need to frame the discussion around what’s best for kids, then how to generate the political will to accomplish it,” Jordan said.

Both Kansas’ system of funding schools and how schools prepare students for success are at a crossroads.

On the education side, Kansas Education Commissioner Randy Watson and the Kansas State Board of Education are discussing how to reform schools to address public desires for students to have a better grasp on so-called soft skills, such as conscientiousness, collaboration and communication.

Watson conducted a listening tour earlier this year in which nearly 2,000 Kansans and business groups said by an overwhelming majority schools should emphasize the skills students need for post-secondary education, the workplace or both. In conjunction with KASB’s Fall Summits, Watson made presentations about the listening tour results.

On the finance side, Kansas’ current block grant system has been declared unconstitutional by a three-judge panel. That ruling has been appealed to the Kansas Supreme Court.

KASB has gathered research on finance systems and student outcomes in adjacent, peer and aspirational states. 

KASB’s Mark Tallman, associate executive director for advocacy and communication, said Kansans need to decide what kind of education system they want and then determine how to finance it.

“What is the formula to fund the system we want to have, not the system we used to have,” Tallman said.

Tallman said policymakers should look at what has worked well in Kansas and states that outperform Kansas in forming a new school finance plan.

Jordan noted that, historically, efforts are made periodically to change funding plans. 

“Every 20 to 25 years there is a major adjustment in the funding process. We are probably at that point now,” he said.

The summits were held over two weeks in Sublette, Oakley, Salina, Olathe, Greenbush and Clearwater. They also included meetings by USA/Kansas (United School Administrators of Kansas) and KSSA (Kansas School Superintendents Association).

Tax Revenue Again Falls Below Estimates (A Report from KASB)

Tax revenue for September fell $31.7 million,
or 5.7 percent below estimates, continuing a trend of underperformance and
raising the possibility of more budget cuts.



The anemic tax collections exacerbated the
first quarter of the fiscal year, which started July 1. Now, the state is $42.5
million, or 3 percent below estimates.



That is more than half of the estimated fiscal
year ending balance of approximately $70 million, so if revenues continue to
fall below projections, budget cuts or tax increases may be a possibility in
the 2016 legislative session, as legislators gear up for election season. 



Gov. Sam Brownback's administration blamed
drops in oil, gas and farm income on the lower collections. Democrats blamed
Brownback's significant income tax cuts.



House Speaker Ray Merrick, R-Stilwell, said
the weak performing tax collections show the need for the state to streamline
government through a recently approved efficiency study with a private
consultant.



The sobering September tax report came as
Wichita State University’s Center for Economic Development issued a report that
showed growth in the Kansas economy was lagging far behind the rest of the
nation.