We all know the story by now. In 2012, with Republican Gov. Sam Brownback at the helm, Kansas enacted massive state-wide tax cuts. Proponents of supply-side economics insisted that these tax cuts would not only pay for themselves, but would also spur massive economic growth in the state. Brownback said the tax cuts would be “a shot of adrenaline into the heart of the Kansas economy.” He promised that they’d boost investment and increase employment; and he swore they’d “directly benefit our schools and local governments.”
Instead, over the next few years, the tax cuts wrought havoc on the state’s economy and funding for schools, health care, and other priorities. The state’s economy slowed down, their credit rating was reduced, and job creation underperformed nearly every neighboring state as well as the national average. Now, Despite Governor Brownback’s failed “real-life experiment” and dire warnings from Kansas legislators, Congressional Republicans are planning to apply an eerily similar proposal nationwide.
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Jeremy spoke with Kansas State Sen. Dinah Sykes, a lifelong Republican who successfully ran for the Kansas Senate on a platform of repealing Gov. Brownback’s tax cuts after seeing what happened to her kids’ public schools.
Jeremy Slevin: So, you are a Republican—you voted for Sam Brownback when he first ran for governor, but you ended up running for your seat on a slightly different platform. Do you want to talk about how you got involved in running for office?
Sen. Dinah Sykes: I was involved in my children’s school as PTA president, and I started seeing the PTA foot the bill for a lot of things. Helping more with field trips, buying books for the library, and things like that. The classes were getting larger so it made me start asking more questions—going to school board meetings, talking to my representative. I realized that it was more of a state issue with the way that the funds were coming in, so I got involved.
At the time I lived in a different section of Kansas, and when I moved just a few miles it changed my representative and my senator. I tried to open a dialogue with them as well, but I was not listened to because I had a different opinion from them. Before, I was able to talk to my Republican representative—regardless of whether you agree with someone or not, you should be able to have a dialogue with them. So, I was frustrated trying to figure out what to do next. I didn’t know if I should try to find a good candidate to get behind or start with the school board or what, and doors seemed to open and open and so I finally decided to run for the Senate seat.
JS: And at some point, Gov. Brownback and the legislators passed major tax cuts for businesses and a lot of wealthy folks in the state. How did that play a role in the schools and your decision to run?
DS: In 2012, the tax plan created a loophole for businesses so that if they were an LLC, they were not taxed on pass-through income. We also had three tax brackets and we went down to two.
It did not work. We had nine rounds of budget cuts. Borrowed $2 billion from our highway fund. Now I’m all for bonding that money when it’s building infrastructure, but that’s not what it was used for. It was there to bridge the gap and to try to do a sales tax increase. Meanwhile, class sizes were large and my school had not bought library books for five years. And we were seeing that the core function of government was not able to work properly.
JS: Was it tough to challenge someone in your own party?
DS: Yeah it was challenging, and you’re going against an incumbent that’s sitting on a pot of money. For me, someone who is new to this, I was just making sure I built those relationships with local leaders and my chambers of commerce, and talked to my neighbors. It really was a grassroots thing, trying to get the everyday Kansan more involved.
I think honestly that the everyday Kansan and the everyday American want people to work together. And it’s not, “I have this great idea and everyone needs to come on board with me,” it’s, “How do we work together?” and “I have this point of view and you have a different point of view and how do we come together and compromise?” Compromise has become such a negative word in politics, but that is how good policy is made.
JS: The reason we are talking about this today is that the Trump administration and some Republicans in Congress are considering similar legislation that goes a step further from what Kansas does. What words of wisdom would you give to your colleagues in Washington who are considering this tax bill?
DS: There are differences between the federal plan and Kansas plan. When the Kansas plan was first brought on the Senate floor, the plan had pay-fors in it, and I’m seeing some of that with the federal plan. But my biggest caution is to let the process work properly. Work both sides of the aisle, come together, have the committee sessions where you vet things. Don’t look for just the dynamic scoring Dynamic scoring analyzes the bugetary impact of major legislation under different possible economic outcomes. or whatever that’s just going to paint your picture. Look at both sides and have those conversations. At the end of the day, make the hard choice and look at what is really in the best interest of our people.
JS: Are you worried that, similarly to how Kansas faced budget cuts following the tax cuts, the same thing could happen at the federal level? I think currently the federal bill costs about $1.5 trillion, not factoring in dynamic scoring as you mentioned.
DS: It is a concern, and I am going to try to stay optimistic and have faith that as more and more people are coming out and wanting to pass good tax reform, that we don’t short-change the process. That we do look at all sides and come up with a good plan.
JS: And going to back to what happened in Kansas, there’s a light at the end of the tunnel. We should mention that after you got elected you guys went about repealing some of these tax cuts.
DS: Yes, in the end of our session we did pass a bipartisan bill. That took us back, it got rid of the loophole for LLCs, so businesses are back on the tax roll. It increased income rates for all Kansans and we added back in the third tier on our tax plan. It was painful and a lot of compromise. Like I said, I think that’s when you make good policy: When you work together, both parties. We were writing on a white board, “What are things you want to see?” “How do we establish this?”
And at the end of the day we had to come up with an override because our governor did veto it. But we had conservatives with roles as well as moderates, and we all came together and passed the plan.
JS: And how has that affected the budget cuts? Have you seen a return to funding in the schools or is that going to take some time?
DS: It will take some time. We did put more money in and we are still in litigation with the Supreme Court on our school funding. We were able to give pay raises to state employees who have not received pay raises in 8 to 10 years. We are seeing our revenues increase monthly, but you know it’s caution. And we didn’t get in the hole that we are in overnight and we are not going to get out of it overnight.
JS: Thank you so much, senator, we really appreciate you taking the time. Hopefully, members at the national level can learn some of the lessons from what happened in Kansas.
DS: Alright, thank you.
This interview was conducted for Off-Kilter and aired as part of a complete episode on November 10. It was edited for length and clarity.