Let's put sensible investments above austerity and radical tax cuts

Randi Weingarten, AFT President

IN HIS 2004 BOOK, What’s the Matter with Kansas?, author (and Kansas native) Thomas Frank explored how conservative extremists took hold of a state that had long been associated with good government and moderation. A decade later, that conservative grip has tightened through extreme social policies, elimination of tenure and due process for teachers, deep cuts to public services and radical tax cuts that have made Kansas a leader of an alarming fiscal trend.

Kansas Gov. Sam Brownback has led the anti-tax charge. In 2012, Brownback enacted one of the largest income tax cuts, in terms of percentage, ever adopted by a state in a single year. The following year, he cut income tax rates again, moving Kansas closer to his stated goal of eventually eliminating the state’s income tax. Additional tax breaks favor large corporations and offer loopholes for businesses.

The tax cuts also disproportionately benefit the wealthy. An analysis by the Center on Budget and Policy Priorities found that most of the benefits went to high-income households and that Kansas even raised taxes for low-income families to offset a portion of the revenue loss.

Proponents of tax cuts often claim that the cuts will have a positive effect, stimulating economic growth and therefore revenues. This claim is not backed by serious economic analysis. In Kansas, the deep income tax cuts resulted in large revenue losses, extending and worsening the damage from the Great Recession. Funding for public schools is 17 percent below pre-recession levels, and funding for higher education is down 23 percent over the same period. Local health departments have taken a hit, and support for families living in poverty has also declined. Sixty years after the U.S. Supreme Court ruling in Brown v. Board of Education of Topeka, Kansas, the Kansas Supreme Court recently ruled that the state’s financing of its public schools is unconstitutional, ordering the state to direct $129 million to additional school spending.

During the recession, few states avoided making deep and painful cuts. But lawmakers in some states, rather than treating budget cuts as unfortunate temporary measures during the downturn, seized upon the economic crisis as an opportunity to slash government services. Many of them followed the lead of the American Legislative Exchange Council, which pushes “model bills” to cut and privatize public services, support tax policies to benefit the wealthy and limit voter participation.

In states that have slashed both taxes and services, austerity is a choice. A report from the Economic Policy Institute found that 12 states that enacted dramatic service cuts in 2011 also provided large new tax cuts. The report shows that Michigan, for example, “adopted a bill, authored by an ALEC member, that eliminated the state’s primary business tax and substituted a flat 6 percent corporate tax—costing the state $1 billion in lost revenue—even while cutting K-12 funding by $470 per student.”

Even some states that withstood the recession have followed suit. When Wisconsin Gov. Scott Walker took office in 2011, the state was one of only a handful not facing a budget crisis. Yet Walker cloaked his crusade to eliminate collective bargaining rights for the state’s public employees as a “budget repair” bill. According to the EPI, the state’s budget “went into the red only after the governor, as one of his first acts in office, enacted large new tax cuts for the business community.”

Investing in high-quality public services helps build a more fair, just and prosperous society. It also is sound economic policy. States such as California and Minnesota, which took steps to raise revenues during the recession, are experiencing more robust recoveries than states like Kansas, Pennsylvania and Wisconsin, which pursued austerity and tax cuts.

Public services are necessary for the common good. We must invest in infrastructure improvements to support jobs and businesses, protect the quality of our air and water and the food we eat, and ensure our children are prepared for the demands of the future. These are sensible investments for the broader community that should not be cut short.

AFT Public Employees and our affiliates support efforts to create a system of state and local revenues that is adequate, stable and fair. To that end, we are working to close the tax gap between what individuals and businesses owe and what is collected. We call for enforcement of tax laws that are already on the books. We support efforts to ensure that companies doing business online collect appropriate sales and use taxes and remit them to state and local government. We favor ending corporate tax avoidance and the use of overseas tax shelters.

The work our members do helps keep our communities safe, healthy and vibrant. Through our unions and with our community partners, we must ensure that there are necessary resources and support to reclaim the promise of the high-quality public services all Americans deserve.

Where We Stand, Public Employee Advocate, Summer 2014