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2013 July 8 - 12:00 am

Kansas Chooses Tax Cuts Over Education Investment

TOPEKA, Kan. (AP) — Higher education officials in Kansas argue that public universities and colleges are crucial to economic growth but still will see their state funding shrink because many members of the Republican-dominated Legislature believe income tax cuts will be a bigger engine of prosperity.

State Board of Regents members worry that the funding reductions will hinder their efforts to improve academic programs and add additional doctors, nurses, engineers and professionals. Last week, the board raised tuition at state universities, and members declared that the increases were higher than they wanted because of legislators’ actions.

But Kansas’ higher education system operates in the broader political context created by Republican Gov. Sam Brownback’s desire to eventually eliminate personal income taxes. He and his allies argue that phasing out such taxes will free up capital, spur investment, create jobs and permanently boost the state’s economy.

Brownback balanced his push for additional cuts in income tax rates this year with proposals to keep state funding for higher education flat for the next two years. But Republican majorities in both chambers demonstrated that they consider lower income taxes more important than public universities and colleges to promoting economic growth.

“They’re not the main factor in economic growth in this state,” said Senate Majority Leader Terry Bruce, a conservative Hutchinson Republican. “There’s the priority of the Kansas Legislature over the last couple of years, to focus on tax policy to create a better business environment to create growth, as opposed to investing in, or spending money on, the regents system.”

The cuts approved by legislators total about $44 million over the next two fiscal years, beginning in July. For each of those years, state funding will be about 3 percent less than it is under the current budget — about $754 million instead of the current $776 million, according to the regents. The bulk of the reductions will come from universities’ budgets.

Brownback’s proposals for flat funding meshed with the tax policies he’s advocated over the past two years, which stand to save Kansans a total of $4.1 billion through June 2018.

The regents and other top higher education officials have been careful not to publicly criticize efforts to position Kansas to phase out personal income taxes. They supported Brownback’s proposals for flat state funding, rather than advocating for increases.

“I don’t think that the two are necessarily in conflict with one another,” said incoming regents Chairman Fred Logan, of Leawood, a former Kansas Republican Party chairman. “I think you can have economic growth and tax cuts, but I don’t think you can have economic growth and cut the budgets of higher education.”

The regents argue that higher education improves a worker’s potential earnings but also that university research fuels economic innovation and growth.

Regent Kenny Wilk, of Lansing, a former Republican in the Kansas House who served as chairman of both its Taxation and Appropriations committees, acknowledged that the board may need to be more aggressive about presenting its case. The board’s goal is for 60 percent of the state’s population to have a university or community college degree or technical college certification by 2020, compared to the current figure of about 50 percent.

“The whole strategy has been based upon a stable funding stream,” he said.

Fort Hays State University President Ed Hammond said tax cuts can stimulate the economy, but businesses need trained workers to expand or come to Kansas, making a strong higher education system crucial.

“It’s like the farmer who goes out and plants wheat and fertilizes it and never harvests it,” he said. “The circle has to be completed if it’s going to be successful.”

Wilk said the regents “own” some responsibility for this year’s funding reductions because, “We need to get ahead of the message.”

But each legislative chamber also has a strong contingent of conservative Republicans who argue that shrinking state government and cutting taxes aggressively will create prosperity.

Many of them view private business investment as more potent than government spending for stimulating the economy. Rep. Scott Schwab, a conservative Olathe Republican serving on the House Taxation Committee, said legislators have heard for years that strong education and transportation systems are vital to economic growth, only to see Kansas lag behind other states economically after making major investments.

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