Even Wall Street Thinks Sam Brownback’s Policies Are a Disaster

Kansas is facing a hit to its credit rating.

Michael Brochstein/ZUMA

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It turns out the companies in charge of assessing whether a state is on stable financial footing aren’t fans of trickle down economics. Tax cuts passed five years ago at the behest of Kansas Gov. Sam Brownback (R) have left the state in perilous fiscal shape. And now, one of the major ratings organizations is warning that it might lower the state’s credit rating after Brownback vetoed tax increases last week.

Early in his tenure as governor, Brownback pushed a series of steep income and business tax cuts—the biggest in state history, with the benefits heavily tilted to the wealthy—as a means of juicing the state’s economy. The cuts, he argued, would spur massive job growth and bring in enough new revenue to offset the lower tax rates.

That hasn’t panned out. Tax collections have regularly come in far below expectations in recent years, leaving Kansas lawmakers scrambling to slash government services in order to comply with a state law requiring a balanced budget. (Most states, unlike the federal government, have balanced budget requirements.)

After a wave of moderate Republicans and Democrats won in last November’s election by campaigning against Brownback’s tax cuts, it looked like Brownback’s policies could be repealed. Two weeks ago, the state House and Senate voted to increase the state income tax (though not all the way back to the pre-Brownback levels) and to end an exemption that allowed certain classes of business owners to zero-out their state income tax. But Brownback vetoed the bill. The House managed to cobble together the two-thirds majority to override the governor’s veto, but the Senate fell three votes shy of overruling Brownback.

Credit rating agency Moody’s isn’t a fan of Brownback’s veto. According to the Topeka Capital-Journal, Moody’s issued a statement Monday warning that the state could see its rating downgraded as a result of lawmakers’ continued inability to find a permanent solution to the lack of revenue. “With the state for now sticking with a lower-tax policy,” the statement said, “Kansas will continue to struggle to balance its budget, consider deferring pension contributions again, and drain its highway fund of funding for crucial transportation projects.”

If Moody’s follows through on the threat, it wouldn’t be the first time Kansas got a credit downgrade thanks to Brownback. Last year, both Moody’s and S&P lowered their ratings for the state, after having previously done so in 2014. Moody’s gave Kansas a negative outlook for the future last year, and S&P said: “The downgrade reflects what we believe to be structural budget pressures.”

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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