Opinion: Fiscal Responsibility Critical to Rebuilding Kansas

Just two short years ago, the State of Kansas found itself on the brink of financial disaster. Even after depleting state savings and enduring multiple rounds of devastating budget cuts, unsustainable tax policy continued to perpetuate fiscal crisis. We saw schools close and class sizes grow. We saw an overwhelmed child welfare system let children fall through the cracks. And despite promises of immediate prosperity, Kansas routinely ranked among the nation’s worst in multiple economic indicators.

Governor Laura Kelly
Laura Kelly was sworn in during the Kansas Governor Inauguration ceremony this past week. Kansas Governor Kelly took office on Jan. 15, 2018, with a ceremony that was held on the steps of the capitol building in Topeka, Kansas.

As the budget hole continued to grow, the legislature passed two sales tax increases, swept more than $2 billion from the state highway fund, delayed numerous payments to the state pension system, accumulated historic levels of debt, and raided every critical investment from early childhood education to public safety. But in the end, none of these short-term band-aids could stem the bleeding caused by the reckless Brownback tax experiment. In November of 2016, Kansans called for change.

The very next year, the state hit “reset” in a historic act of bipartisanship with the passage of comprehensive tax reform. Our credit score improved within a week. The number of Kansans participating in the labor force increased for the first time since 2014.

We have only just started the rebuilding process. Our recovery is uncertain; our budget is fragile. The State of Kansas cannot afford to make a U-turn now.

Senate Bill 22 – another reckless tax plan – would absolutely dismantle all the progress we’ve made. It would throw our state once again into a self-inflicted budget crisis, diminishing all the investments we’ve worked so hard to rebuild and restore. It would put our future at risk once again in order to give significant tax breaks to entities who need them the least while continuing to leave working families behind.

I share Kansas lawmakers’ desire to keep the state tax burden as low as possible and that will continue to be a priority. In January, I presented a structurally balanced budget that funded our schools and roads, reduced state debt, left Kansas with the largest ending balance in 20 years and did so all without a tax increase.

I was a math major. This is about basic math. My budget proposal left a healthy, fiscally responsible ending balance. If I had signed Senate Bill 22, the budget that just passed the Senate would fall to more than $600 million in the hole within two years.

That is unacceptable. That is irresponsible.

We must be patient, thoughtful, and prudent as we evaluate tax policy. And, when we move forward with sustainable, commonsense tax relief, we must ensure that it benefits the Kansans who need it the most. We will focus on reducing the sales tax on food and providing real tax relief to working families.

The people of Kansas elected me to rebuild our state. They elected me to bring fiscally conservative and responsible principles back to our government. And I refuse to endorse another round of fiscally reckless policies – similar to the Brownback tax experiment – that left our state in shambles and our families struggling.

I commit to you – the people of Kansas – that I will stabilize our state’s budget, invest in our shared priorities and continue the recovery we have all fought so hard to begin. By following through on this commitment, our state has every reason to expect a bright and successful future.

Governor Laura Kelly

Governor of Kansas

Topeka, KS

 

Opinion: What is a Market-Based Approach to Water Quality?

Last month, the U.S. Department of Agriculture (USDA) and the U.S. Environmental Protection Agency (EPA) released a joint letter encouraging market-based, collaborative approaches to reduce excess nutrients in waterways. But, few other details were offered on how to best take this approach.

There are three possible market-based strategies for water quality improvement: nutrient reduction exchange, wetland mitigation banking, and environmental impact bonds.

Comparable to a cap and trade program, the nutrient reduction exchange ties downstream municipalities to upstream partners through voluntary efforts. This approach focuses on reducing nitrogen and phosphorus by leveraging cost-effective projects that would be more affordable than removing nutrients at a water treatment plant. This strategy has been tried in the Ohio River Basin.

With wetland mitigation banking, flood risks can be minimized by holding and slowing the flow of water—also allowing nutrients and sediment to filter out. In addition, wetlands can provide a natural habitat for birds and waterfowl. The idea behind this approach is to encourage new investments in water quality and flood mitigation by restoring wetlands.

Environmental impact bonds have been used recently by major cities to finance infrastructure projects to improve water quality, particularly from stormwater runoff. Washington, D.C. first used this tool in 2016, followed by Baltimore and Atlanta. What makes environmental impact bonds different from other green bonds is that they use a “pay for success” model focused on achieving environmental outcomes, which requires them to have a measuring and monitoring component for investors.

Any of these three market-based strategies could play a key role in building a cleaner, healthier, and more productive future. Learn more at cfra.org.

By Katie Rock, katier@cfra.org, Center for Rural Affairs