Kansas Governor Proposes Using Pension Money to Cover Budget Gaps Created By His Tax Cuts
By David Sirota
IBTimes.com
December 15 2014
In 2012, Kansas Gov. Sam Brownback signed a landmark bill that delivered big tax cuts to high income earners and businesses. Less than two years after that tax cut, the state’s income tax revenues plummeted by a quarter-billion dollars — and now Brownback is pushing to use money for public employees’ pensions to instead cover the state’s ensuing budget shortfalls.
Brownback’s proposal: Slash the state’s required pension contribution by $40 million to balance the state budget. But Kansas already has one of the worst-funded pension systems in the nation. The state was also recently sanctioned by the Securities and Exchange Commission for not accurately disclosing the shortfalls.
Brownback, an icon of tea party economics who was re-elected in 2014, defended his proposal to divert money from the Kansas Public Employees Retirement System (KPERS), telling the Wichita Eagle: “It’s kind of, uh, well where are you going to go for the funds? And I don’t like it, but it’s kind of what’s your other option if you don’t hit K-12 and higher ed with allotments?”
Brownback joins fellow Republican Gov. Chris Christie in coupling large tax cuts and credits with cuts to actuarially required pension payments. In New Jersey, Christie slashed required pension payments while signing legislation expanding tax credits to corporations, and doling out a record amount of corporate tax subsidies. Many of those subsidies have flowed to firms whose executives have made campaign contributions to Republican political organizations. Last week, New Jersey pension trustees filed a lawsuit against Christie for not making legally required contributions to the state’s pension system.
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