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Kansas Issues $840 Million Debt Certificate To Cover Brownback’s Trickle Down Catastrophe

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Tuesday, June, 30th, 2015, 9:05 pm

BrownBroke
It is more than likely that there are very few Americans who still believe that the Republicans’ only economic policy, trickle down, is anything but a raging failure. Obviously, Kansas residents suffering a continued financial catastrophe still believe their governor, Sam “trickle down” Brownback, when he promises that the god-sent trickle down scheme to enrich the wealthy at the expense of the state’s budget, the poor and middle class, education, and social services will make the state the envy of the entire nation. Now, after a record-setting tax hike on the poor and middle class and truly Draconian social service cuts, the state is so broke that Brownback and Republicans had to resort to issuing a certificate of indebtedness to prevent the state from complete financial demise. It is the second year in a row that Brownback’s disastrous trickle down experiment resulted in going in debt to keep the state solvent while the rest of the nation not under Republican control is experiencing economic growth.

A certificate of indebtedness is a form of monetary obligation that is sometimes issued by a public entity or private corporations that are, for all intents and purposes, like a bond; except they are not secured. A certificate of indebtedness is, then, effectively what a normal American would consider an I.O.U., and depending on the person or entity issuing it, likely worthless as far as having any legitimacy for making purchases or paying debts.

One thing is certain; in the real world Republicans perpetually cite, no American family would even consider walking into a grocery store, or schedule their car to be serviced, and expect them to provide a product or service in return for an IOU. In fact, it is highly likely that no American would consider trying to make a purchase or schedule a service without having access to the available funds. Instead, they would seek a means, likely by taking a second job, to bring in enough revenue to pay their bills and buy their groceries.

This week, after yet another year of crushing debt due to severe revenue shortfalls borne of “fiscally-responsible” trickle down tax cuts for the rich and corporations, Kansas Republicans and Governor Sam “fetus” Brownback signed off on the state’s largest tax increase on the poor and middle class and issued a record $840 million certificate of indebtedness for the upcoming fiscal year.

The desperation move came as Kansas’ budget director verified what Sam Brownback, Republicans in the legislature, and most of America have known for three years running; due to Brownback’s failed repeat of Bush-Republicans’ 8-year failed trickle down experiment he said his god overwhelmingly approved, the state government would have insufficient resources to meet its obligated expenditures in the fiscal year starting tomorrow, July 1, 2015.

The new Kansas record for an IOU in lieu of paying its debts eclipsed the previous record that was set during the 2009 fiscal year after Bush-Republicans’ Great Recession crashed the state’s revenue and after deep cuts failed to stem the budget crisis. At the time, the Kansas State Finance Council issued three certificates of indebtedness to borrow a total of $775 million that foreshadowed a 1-cent, three-year increase in the statewide sales tax in 2010 to put the onus on the poor and middle class, again, to make up for another Republican (Bush’s) trickle down failure that contributed to the Great Recession. Just about one year ago the Finance Council approved another indebtedness certificate to the tune of $675 million for the currently-ending fiscal year that trickle down Sam had promised was the last time because he swore that Kansas’ fiscal fortunes would miraculously improve because tax cuts for the rich and corporations, and therefore less tax revenue, was certain to bear trickle down fruit and bring in much more tax revenue.

That is, after all, what Governor Sam Brownback promised throughout his re-election campaign while he held up the fetus card, but when the Republican-led legislature returned for work in January they were confronted with exactly what any sane human being should expect when tax cuts for the rich and corporations produce less tax revenue; another crushing revenue shortfall that required a series of mid-year budget cuts to education, government, and social services. Recently, when even drastic budget cuts failed, as expected, to bring in more tax revenue, Brownback and Republicans passed a record tax increase affecting the poor, middle class, and typical of Republicans, managed care facilities for the elderly and disabled. Still, like any American knows, slashing a budget or cutting expenses does not, and cannot, bring in more revenue.

Instead of even considering rolling back unfunded tax cuts for the rich and corporations, Republicans and their hero Brownback approved $400 million in tax hikes in an attempt to close the certain 2016 fiscal year budget deficit. Those tax hikes affecting the poor and middle class were general sales taxes on necessities like groceries, eliminating middle class citizens’ itemized deductions, and imposing a tax increase on managed care facilities. The tax hikes on the poor and harsh budget cuts were no solution for the Kansas revenue shortfalls and going deeper in debt was Brownback and Republicans solution of choice.

According to Brownback and Republican legislation, instead of ending tax cuts for the rich, the governor had to come up with $50 million in budget cuts and he naturally cut education, healthcare, and social service funding. It never entered Brownback’s mind to rescind even part of the tax cuts for the rich and corporations because he has promised for three years that cutting revenue by giving the wealthy and corporations tax cuts increases state revenue and allows wealth to ‘trickle down’ to the poor and middle class.

On Friday last when Democratic lawmakers gathered at the state capitol for ceremonial final day of the annual legislative session, they expressed exactly the same exasperation they have over the past two years with expansion of the state’s debt that must be repaid by June 30, 2016. Obviously their exasperation is due to increasing the state’s debt obligation after Brownback squandered the budget surplus he was left by his predecessor, but also because they are well aware there is no possible way the state’s revenue is going to increase as long as Brownback’s tax cuts for the rich and corporations stay in place and cut revenue.

The Kansas House Democratic Leader, Tom Burroughs, uttered the obvious and said this record-setting escalation in borrowing “illustrated the precarious financial condition of state government.” Burroughs also noted that the only reason the state budget is in freefall is because of the trickle down decisions in 2012 by Brownback and the Republican-led legislature that foolishly exempted 330,000 businesses from paying income taxes and slashed individual income tax rates primarily affecting the very rich. Burroughs’ said “This is a direct result of Governor Brownback’s failed fiscal experiment. Until members of the legislature take steps to implement a responsible and sustainable budget, the state will continue to be forced to borrow money to cover expenditures.” The Kansas Senate Minority Leader, Anthony Hensley, was more blunt and said that the state’s budget woes are entirely due to Brownback and Republican legislature’s “incompetence and mismanagement” of the budget. Hensley said that “Governor Brownback and the Republican Legislature are responsible for the largest tax increase in history and, now, the largest certificate of indebtedness in history.”

What neither Hensley nor Burroughs would say out loud is that unless Brownback and the GOP legislature rescind, or at least drastically roll back, tax elimination for corporations and tax cuts for the rich, next year at this time Kansas Financial Council will be forced to issue yet another, record setting, certificate of indebtedness while Brownback and Republicans make more drastic budget cuts, pass another tax hike on the poor and middle class, and then promise yet again that tax cuts for corporations and the rich will create a revenue bonanza the entire nation will marvel at; it is the same promise Brownback has made for the past three years and the results have been, and will continue to be, the same.

It was a mystery why Kansas voters re-elected Sam Brownback and a Republican-dominated legislature when everyone of the state’s residents were aware that the state’s financial catastrophe was due to Brownback’s failed trickle down ‘experiment.’ Still, Brownback knew that all he had to do to guarantee he would get four more years to completely decimate the state’s economy was drag out that tired old fetus to bring out the religious right vote. Maybe it will take resident’s seeing their state in bankruptcy, their roads crumbling before their eyes, and schools, hospitals, and law enforcement agencies closing down before they come to their questionable senses.

Kansas Issues $840 Million Debt Certificate To Cover Brownback’s Trickle Down Catastrophe was written by Rmuse for PoliticusUSA.
© PoliticusUSA, Tue, Jun 30th, 2015 — All Rights Reserved

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