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News Item:

"Kansas Fiscal Woes Forcing Brownback To Consider Medicaid Expansion"

Talking Points Memo is reporting this morning that "Gov. Sam Brownback (R) and the Republican-controlled legislature in Kansas is inching ever so slowly toward expanding Medicaid under Obamacare". Up to now, Brownback has been in lockstep with conservative Republicans opposed to the Affordable Care Act. Like other GOP-dominated states, Kansas has declined to expand Medicaid coverage, a key building block of the ACA program. Now, however, the state's dire fiscal condition appears to be goading the Republicans into re-assessing their Medicaid stance. Ironically, Kansas budget woes are totally self-inflicted.

In 2012, Brownback and the legislature enacted huge tax cuts to take effect in fiscal year 2014. Their rationale, typical of tax-cutters who subscribe to "supply-side" theories, is that the cuts would spur strong economic growth sufficient enough to replace the lost tax revenue. Up to the point the cuts would take effect, Kansas was in good fiscal condition, with over $700 million in a reserve fund and a FY2013 budget surplus of $200 million.

What could possibly go wrong? The envelope, please.

For FY2014, Kansas' revenues were $333 million below the Republicans rosey projections. Even though the budget had reduced spending, the state still faced a $329 million deficit. Rather then raise taxes or reduce spending further, the Republicans simply dipped into the reserve fund.  Eschewing any changes in the tax-cut program, the Brownback administration maintained that shortfalls were a temporary, one-time issue which would not re-occur in 2015.

That is not exactly what is happening.

Kansas is again facing an estimated $344 million deficit. It has depleted the reserve fund. The governor and the legislature are now engaged in various budget manipulations (decreasing pension contributions, diverting money from other funds to the general fund) to effect near-term fixes. (Kansas, as do many other states, has a staturary balanced-budget requirement.) One of the areas Brownback has attacked is the funding of education, but he is now dealing with a state court ruling that the cuts to education were unconstitutional. The governor is appealing to the state Supreme Court; if he loses the appeal, Kansas would have to find another $500 million in revenue.

Oh- the projected deficit for fiscal 2016 is $600 million. The results of what Brownback called a "real live experiment" back in 2012 are not what he promised.  Up to now, these circumstances have not given Brownback cause to disavow his supply-side theories.

So, please let's not cloud the issue with the facts.