Kansas - More Liberal than you Might Think

Many believe Kansas is the heart of the Bible belt. They believe the population is ultra conservative, pro-life, and that most of us are farmers. The truth is rather different. The land of Bob Dole has dabbled recently in liberalism. Over the last decade, Kansas elected a Democrat governor (Kathleen Sebelius), and a couple of Democrat Congress people. Dennis Moore was my representative when I lived in Overland Park, and Nancy Boyda became my representative when I first moved to Basehor. Fortunately, Boyda was one of the few Democrats voted out in 2008 based on her bone-headed behavior toward a general during a readout on Iraq. Even more better, Dennis Moore has announced that he will not run for reelection - he knew he could not win in this environment. Governor Sebelius has moved on to become the HHR Secretary Sebelius serving the Obama administration.

So it would appear that we in Kansas are very close to a Democrat-free zone. While their time in office is waning, their legacy continues. And we Kansans are on the verge of paying for our mistake. Before Sebelius left office and when confronted by a difficult Kansas budget pinch she chose to ignore it. Did she know she was destined for Washington? Her Lieutenant Governor, Mark Parkinson, is now the acting Governor. Mark has inherited the difficult budget ignored by Sebelius.

Earlier this week, Parkinson put forth his plan for balancing the budget - something states are required to do since they do not own a printing press. Parkinson is a Democrat, so can you guess what his plan is? A gold star to everyone who answered that his plan is to raise taxes. He called out two specific taxes, the sales and tobacco tax. He wants to raise tobacco taxes by 55 cents per pack, and sales tax by 1%. Comically, he proposes the sales tax increase would only be effective for 36 months. Anyone who would believe that 1% increase will ever expire is simply naive.

Parkinson's excuse for the tax increases are absurd. First he states that he cannot find enough cuts in the state budget to make up the short fall. I will address that folly a little later. He then claims that raising taxes is okay because Kansan's currently enjoy tax rates that are below the national average. If that were a reasonable reason, then I guess all states with below average tax rates should raise their tax rates to at least the national average. That would move other states below the new national average, so they could then increase taxes. This vicious circle would continue every year until government gets all the money. We could extend that same logic at the county and federal levels too. If any levied tax rate is below average, that in itself justifies raising it. This is Democrat's logic at it finest.

Parkinson also claims he cannot meet the budget shortfall through cuts. From a purely business perspective, I am skeptical. Over the past 9 years, I have worked in an environment where budgets are repeatedly cut. The cuts were easy to find during the first few years, but finding subsequent cuts becomes more and more difficult. Yet, we found them and the business moves on.

We found those cuts because there was no alternative. Some of the cuts were to previously sacred expenditures that had never been considered before. Many people wondered if the business could survive such cuts. The cuts were made since we had to, and the business survives. In a competitive environment you do not have the luxury of increasing prices as governments do with taxes to increase revenue. Higher prices force customers to move to a lower price provider, and result in reduced revenue to the business. Governments, especially Democrat-led ones, believe that taxes can be raised and will result in revenue increases. Because of this belief, they take the path of least resistance and increase taxes before making the hard decisions required to scrutinize budgets like there is no alternative.

But the hard decisions will come, eventually. Tax raising never brings in the expected revenue, especially in a depressed economy. Raising the tobacco tax will force many people to stop smoking. While this is a good thing, fewer smokers means fewer packs of cigarettes to tax, resulting in the government take to be less than expected. A sales tax increase will also bring in less than expected revenue. The government projection assumes that sales will remain flat, but businesses and individuals will change their behavior. Businesses routinely use local sales tax as a deciding factor on where to open or expand their businesses. Individuals will consider tax rates before making major purchases such as appliances or cars. Parkinson's tax plan may raise revenue by $400 billion on paper, but reality will be less. He will again have a budget emergency, and need to rebalance the budget next year. At what point will he take a hard, no alternative look at cutting the budget? It is the only sure fire method of achieving balance.

I reject the notion that Parkinson can't find $400 million in savings from a $5.8 billion state budget. That represents less than a 10% cut. Businesses were cutting expenses by 10% eight years ago. Since then they have gone back for more cuts time and time again - all because there was no other alternative. State governments should look at their budgets with the same rigor. Raising taxes should never be the first or only option.

But a tax increase is on the horizon. Kansans will pay for the mistake of electing Sebelius. After all her man, Parkinson, is simply acting like a Democrat.

Morale of the story: Always lean to the right. Even a bad conservative will do far less damage than a good liberal.