by Steve Anderson, Patrick Parkes
Kansas Policy Institute
July 29, 2014
States with the lowest tax burdens outpace the highest-burden states in private sector job growth, wage increases, and private sector GDP. States can only afford to tax less because they spend less – thus, states must control spending in order to create jobs. How can states do this while still offering quality public service? Until long-term strategies can be implemented, there are several options for legislators to “buy time” towards lower spending – cash balances from agencies that spend below their budgets can be used to offset costs in red-ink areas, while automatic fund transfers to agencies should be replaced by line-item allocations in the state budget. Given time, privatization of public agencies, an end to handouts disguised as “business incentives,” and the creation of a State Efficiency Commission will allow for the kind of savings that allow for low taxes and continued economic flourishing.