The state budget director called criticism of Gov. Sam Brownback’s tax cuts “fake news” in a speech to a Republican club Friday.
Members of the Wichita Pachyderm Club cheered that characterization by Brownback’s budget chief, Shawn Sullivan, in a lunchtime speech.
“The first bit of fake news is the 2012 tax cuts from Gov. Brownback aren’t working,” Sullivan said. “If you read most things, hear most people, hear most legislators, you would hear that these tax cuts he passed a couple years ago were, are, have been, a huge disaster.”
But that’s “not true,” he said.
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Sullivan defended the zero income tax rate for owners of farms, limited liability companies, sole proprietorships and corporations organized under Subchapter S of the federal tax code.
“What’s actually happened was that we’ve had six years of record business formations,” Sullivan said. “Eighty-two percent of all new job creation in the state of Kansas has been through the entities that have received exemption. We’ve reversed 20 years of cumulative wealth loss to Missouri, and lastly we’ve had 37 consecutive months – actually more than that, this is a dated presentation – of unemployment below 5 percent.”
However, a Wichita State University expert on public finance says those numbers are chosen to make the economy and the administration’s performance look better than they really are.
“Even their own Department of Labor wouldn’t necessarily agree with that assessment,” said Ken Kriz, regents distinguished professor in the Hugo Wall of Public Administration.
A recent Labor Department report showed the state lost 2,300 jobs in the last year, he said.
“Most people understand in this state what the economy is like,” Kriz said. “Mr. Sullivan is talking to a smaller and smaller group of people” who agree with his analyses.
Sullivan acknowledged that state tax income growth has been “anemic” at three-tenths of 1 percent since the tax cuts took full effect in 2014. That, he said, is one-twelfth the growth in previous years.
“No, it’s not created enough revenue for a lot of what people want in Kansas, but it’s still created more revenue every year, year over year, and we’re starting to come out from some of the challenges that we’ve had the last couple of months,” Sullivan said.
Sullivan also said the state has struggled with job and revenue growth. But, as Brownback has done repeatedly, he blamed low farm commodity and energy prices.
Tax cuts have actually helped soften the blow from reverses in those industry sectors, he said.
“We believe if this wouldn’t have been done … job growth would have been much worse the last couple of years,” Sullivan said.
Kriz said that Brownback administration statement especially lacks proof.
“I challenge them to produce a good academic study, something that’s peer-reviewed that is carefully planned out that shows that and I will tip my hat to it,” Kriz said. “But I am not going to go on numbers that are pulled out selectively.”