Press Release
May 24, 2006
For Immediate Release

KANSAS SPENDS WHILE NEIGHBORING STATES INVEST
by Karl Peterjohn

Kansas will spend $984.2 million in state funds over the next three years and a record setting state budget as a result of the 2006 legislature. Alan Rupe, the attorney for the litigious school districts, told the Wichita Eagle that this spending hike is inadequate and demanded more May 12. The ethically challenged Kansas Supreme Court, with three of its seven members having had ethics complaints filed against them in this matter during the last year, will soon render their latest verdict in the long-running school finance litigation that began in the 1980's. Three members of this court have endorsed the legal theory that would have the court exercising almost perpetual financial oversight on state public school spending and eviscerating the power of elected officials.

Suing for dollars has been profitable but it is not a universally successful way of setting state budgets. Texas has been undergoing a similar school finance lawsuit and has had a number of special legislative sessions trying to solve their school spending problem. Today, there is now an important difference between Texas and Kansas.

In Kansas' case spending is soaring. In Texas, property taxes are being cut over $15 billion and the average homeowner is looking at a $2,000 reduction in their property taxes over the next two years as extra state revenues are being returned to taxpayers. This cut is partially offset with $4 billion in higher cigarette, sales tax on used cars, and restructuring the business franchise tax. Texas state school spending will also grow $300 million, teachers are getting a $2,000 raise, but the focus is placed on trying to correct property tax problems while improving their public schools. The fiscal focus is upon property tax cuts and rejects raising overall taxes.

In Oklahoma their legislature still has a number of days left in their 2006 session. It now appears likely that Oklahomans will be enjoying another tax cut as state revenues have rapidly grown and a portion is going to be returned to taxpayers. A bipartisan group of state leaders is looking at cutting the state's maximum personal income tax rate by 12 percent to 5.5 percent and begin phasing out the state level death tax. However, Oklahoma legislature's final outcome is still pending.

Kansas is following the liberal policy prescriptions of left-wing groups like Kansas Families United for Public Education (KFUPE). This government school spending lobby believes that high school spending will lead to economic growth. "Quality public schools are essential to economic growth. Businesses must have a well educated work force to draw from to remain profitable," KFUPE's web site claims. KFUPE's web site inaccurately claims that Kansas spending on public schools has not kept up with inflation.

KFUPE also ignores the fact that a number of studies, including the 2006 Kansas Standard and Poors report, that quality education and high levels of spending are not necessarily the same thing. Efficient operating procedures and quality curriculum can mean more to providing quality education than just throwing unlimited tax funds at the schools. Many of the states with the highest level of spending per pupil often lag in educational performance.

However, high levels of government spending can only occur with high levels of taxes and this has a negative economic impact. Oklahoma and Texas are investing by allowing their citizens to keep a portion of the revenue growth created by the 2003 and 2004 federal tax cuts and income repatriation bills nationally. In Kansas, the state will spend it all to meet the school districts' legal demands and try to implement the KFUPE economic growth theory.

The fascinating point is that this is the same fiscal policy that Governor Sebelius' father tried when he was Ohio's governor in the 1970's and raised taxes to fund state spending back then. Bigger government only led to bigger levels of economic stagnation. Government spending growth is a barrier to real economic growth that will be shown once again as Kansas spends its windfall while our neighbors invest in their people.