Today, the Gillespie campaign urged voters to do exactly what Dr. Ralph Northam is doing in a new ad called “Go”: to go to the Northam website and compare their economic visions.

For Immediate Release Date: September 8, 2017 Contact: Ofirah Yheskel, ofirah@ralphnortham.com

FACT CHECK: Just Like His Tax Plan, Ed Gillespie’s Attacks Don’t Add Up *Gillespie Camp Shaken By Northam Ad Urging Voters To Compare Economic Visions * Richmond, Va. — Today, the Gillespie campaign urged voters to do exactly what Dr. Ralph Northam is doing in a new ad called “Go”: to go to the Northam website and compare their economic visions. In a desperate attack, the Gillespie campaign confirmed their only prescription is a tax cut plan for millionaires and billionaires that will jeopardize the commonwealth’s AAA bond rating, tradition of fiscal responsibility, and funding to key areas like healthcare and public education.

Northam for Governor campaign press secretary, Ofirah Yheskel, issued the following statement in response to the Gillespie campaign’s increasing desperation:

“Virginians face a choice: Ralph Northam will build the workforce of tomorrow by supporting education, expanding skills training for good paying jobs, and making Virginia the new destination for the next round of technology jobs. Ed Gillespie’s economic vision for Virginia consists of one thing: a tax cut plan for millionaires and billionaires based on what even Republicans agree is phony math. It would force cuts to education and healthcare, which is no way to train Virginians for better jobs.

“Since April, Dr. Northam has called for a bipartisan tax commission to create a tax code that is fairer, simpler and fiscally responsible, and will create economic opportunity for all Virginians. He has encouraged voters to compare visions, and his includes in-depth proposals for developing the workforce of the 21st century, taking on bipartisan tax reform, and maintaining our balanced budget and AAA bond rating while preserving investments to key priorities like healthcare and public education. Ed simply wants to give fiscally irresponsible tax breaks to the wealthy.”

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Background

Northam’s G3 Plan Will Train Workers For 21st Century Jobs

Northam’s G3 Plan Will Supply Last-Dollar Tuition And Fees For Any Virginian To Get Trained In Targeted, New-Collar Job Areas In Exchange For One Year Of Public Service. “Through the G3 program, the state, its community college system, Virginia businesses, and motivated Virginians will work together to build a skilled workforce able to meet this demand. That includes: State funding for last-dollar tuition and fees for any Virginian who’d like to pursue a workforce training credential or an associate degree in a targeted, new-collar job area; Community college instruction, training and mentoring to ensure program completion; And a one-year commitment of public service from program beneficiaries; Matching applicants with experienced mentors to guide them through training and post-graduation job hunts.” [Northam for Governor, 2/23/17]

• Virginia Saw 175,000 New-Collar Job Openings In 2014, But Delays In Filling Them Cost Businesses 36 Million Hours Of Productivity And Families More Than $1 Billion In Wages. “In 2014, more than 175,000 of these jobs opened up in Virginia. Each one of them, on average, took 26 days to fill, and were often filled by folks from other states. That gap stripped businesses of more than 36 million hours of productivity; families of more than $1 billion in wages; and Virginia’s General Fund of an estimated $54 million in additional state income taxes.” [Ralph Northam, Medium, 2/23/17]
• About Half Of All Job Openings In Virginia Are Projected To Be New-Collar Jobs. “About half of all job openings in Virginia are projected to be new collar jobs requiring less than a four-year degree, especially in areas like cybersecurity, computer/IT, healthcare, early childhood education, and construction trades.” [Ralph Northam, Medium, 2/23/17]

Northam Will Create A Bipartisan Commission To Make The Tax Code Simpler, Fairer, And Fiscally Responsible

Northam Promoted Bipartisan Tax Reform. “Gillespie outlined his tax policies to stimulate a stagnant Virginia economy, while Northam spoke of the need to expand Virginia’s Medicaid program to provide access to health care for more Virginians, and of the need to bring Republicans and Democrats to the table for tax reform.” [The News Virginian, 7/22/17]

Northam “Called For A Commission To Review The State’s Tax Policies” But Supported Repealing The Grocery Tax. “Northam has instead called for a commission to review the state’s tax policies but says he wants to cut grocery taxes paid by the poor.” [The Washington Post,6/12/17]

Northam Proposed Forming A Bipartisan Tax Commission To Make The Tax System Simpler.“Northam said as governor he’d put together a bi-partisan tax commission to make the state’s tax code simpler and more progressive.” [Associated Press, 6/2/17]

Daily Press: “Northam Has Proposed A Partial Rollback In The State’s Sales Tax On Groceries And Promised A Commission To Review Other Reforms.” “Northam has proposed a partial rollback in the state’s sales tax on groceries and promised a commission to review other reforms.” [Daily Press, 5/27/17]

Northam: “I Plan To Start A Commission On Comprehensive Tax Reform, Get A Plan On The Table, And Then Talk To Democrats And Republicans To Move That Forward.” “We have to have a tax code that’s competitive other states. If we don’t, these businesses and manufacturers are going to choose to go elsewhere. I plan to start a commission on comprehensive tax reform, get a plan on the table, and then talk to Democrats and Republicans to move that forward.” [American Prospect, 5/3/17]

Northam Proposed Cutting The Regressive Grocery Tax

Northam Supported Cutting Grocery Taxes. “We now have a governor’s race between two candidates who both want to cut taxes. Gillespie and Northam just want to cut different ones, for different reasons. Gillespie proposes an across-the-board tax cut, which he says would grow the economy; Northam wants to cut the tax on groceries, which he calls regressive. In theory, this allows Virginia to have a calm, but fascinating, conversation about tax policy this fall. Voters who like this sort of high-minded discussion could help facilitate that by ignoring all the other distractions the campaigns will throw their way.” [The Roanoke Times, 6/15/17]

Northam Supported Cutting Grocery Tax. “Democrat Ralph Northam and Republicans Ed Gillespie and Corey Stewart all want to cut taxes – different taxes, mind you. Northam wants to target the state’s groceries tax, which liberals typically find regressive; Gillespie and Stewart are focused on the income tax, which conservatives usually find more objectionable.” [The Roanoke Times, 6/12/17]

Northam Proposed Exempting The Poor From The 2.5 Percent Sales Tax On Groceries. “He also wants to exempt the state’s poor from having to pay Virginia’s 2.5 percent sales tax on groceries.” [Associated Press, 6/2/17]

Northam Proposed Ending The Grocery Tax For Lower-Income Virginians. “Lt. Gov. Ralph Northam made rolling back at least some of Virginia’s sales tax on groceries part of his bid for governor Monday.  The campaign said Northam wants to end the tax for lower-income Virginians, presumably leaving it in place for those above an as-yet-undecided salary threshold.” [Daily Press, 4/24/17]

Northam Proposed A Realistic Rural Tax Plan To Exempt Startups From Certain Locally-Imposed Business Taxes

Northam’s Plan Called For A Two-Year Tax Break For Small Businesses In Rural Areas.“Northam’s newly released plan also calls for additional broadband in rural areas and consolidation of broadband efforts under one state cabinet official, expanding renewable energy and a two-year tax break for small businesses that open in rural and economically depressed areas. His ‘start up’ tax proposal would exempt eligible businesses from two years of business, professional and occupational license tax and merchants’ capital tax.” [Roanoke Times, 7/19/17]

Northam’s Rural Tax Plan Was Praised For Being Bipartisan, Realistic, And Creative

Roanoke Times Editorial: Northam’s Rural Tax Plan “Probably Stands A Better Chance Of Getting Enacted.” “Two different politicians, from two different parties, have proposed essentially the same idea. They both want to give tax breaks for businesses to locate in rural communities. Del. William Morefield, R-Tazewell, has the bigger, bolder plan. He wants to waive income taxes for both people and companies in poor communities for 10 years. Lt. Gov. Ralph Northam, the Democratic candidate for governor, has a more modest plan, which means it probably stands a better chance of getting enacted, assuming he’s sitting in the governor’s chair. He wants to exempt start-ups in ‘rural or economically distressed’ areas from the first two years of certain locally-imposed business taxes.” [The Roanoke Times, 8/30/17]

Roanoke Times Editorial: “The Centerpiece Of Northam’s Plan Is To Waive Certain Taxes For New Businesses Opening In Rural Areas. His Plan Was Both Modest And Creative, An Unusual Combination To Achieve.” “Northam’s plan was both politically smart and politically clever. The plan was smart because Democrats have run poorly in rural Virginia in recent elections; they really need to cut those margins. The plan was clever because it didn’t sound much like a traditional Democratic tax-and-spend approach to problems. Indeed, the centerpiece of Northam’s plan is to waive certain taxes for new businesses opening in rural areas. His plan was both modest and creative, an unusual combination to achieve.” [Roanoke Times, Editorial,8/28/17]

Roanoke Times Editorial Praised Northam For Proposing The Elimination Of The Business, Professional Occupational License Tax And The Merchant’s Capital Tax. “Northam has proposed waiving for two years certain locally-imposed business taxes for start-ups in rural areas — the Business, Professional Occupational License tax and the Merchant’s Capital tax. Gillespie counters that he wants to phase out those taxes entirely for everyone. That may be a good idea, but doesn’t give rural areas a competitive advantage.  Arguably, eliminating those taxes statewide would make rural Virginia more competitive against rural areas in other states, and that’s no small thing. Let’s be clear, though: Rural Virginia wants some of those employers that are currently locating in the urban crescent. Richmond may be agnostic about where in the state a company locates; we are not. Any meaningful Contract With Rural Virginia has to figure out a way to provide incentives for companies to locate in rural areas.” [Roanoke Times, Editorial, 7/28/17]

Roanoke Times Editorial Said Northam’s Plan “To Waive The First Two Years Of Certain Taxes For New Businesses That Open In Rural Areas — Is Really The Kind Of Idea That Republicans Normally Like.” “Last week, Ralph Northam, the Democratic candidate for governor, released his economic plan for rural Virginia.  Ed Gillespie, the Republican candidate, didn’t have much to offer in the way of criticism. After all, the key part of the plan — to waive the first two years of certain taxes for new businesses that open in rural areas — is really the kind of idea that Republicans normally like.” [Roanoke Times Editorial, 7/24/17]

Roanoke Times Editorial: “Northam’s Logic Is Sound” On Plan To Eliminate BPOL Tax For Two Years For New Businesses In Economically Depressed Areas. “The most significant part of Northam’s proposal may be his own tax cut plan. For the first two years for any new businesses in what he called “rural and economically depressed regions,” he’d waive two local taxes — the Business and Professional Occupation License tax and the Merchant’s Capital tax. Northam’s logic is sound: Waiving it for new businesses wouldn’t cost local governments anything, and might encourage new businesses to locate in rural areas. Yes, here’s a Democrat proposing to cut taxes on businesses because he recognizes that businesses employ people.” [The Roanoke Times, 7/19/17]

Roanoke Times Editorial: “Here’s A Democrat Proposing To Cut Taxes On Businesses Because He Recognizes That Businesses Employ People.” “The most significant part of Northam’s proposal may be his own tax cut plan. For the first two years for any new businesses in what he called “rural and economically depressed regions,” he’d waive two local taxes — the Business and Professional Occupation License tax and the Merchant’s Capital tax. Northam’s logic is sound: Waiving it for new businesses wouldn’t cost local governments anything, and might encourage new businesses to locate in rural areas. Yes, here’s a Democrat proposing to cut taxes on businesses because he recognizes that businesses employ people.” [Roanoke Times Editorial,7/19/17]

Gillespie Would Give The Richest One Percent $3,200 A Year, And Would Give A Minimum Wage Worker With Two Kids Just $42 Dollars A Year

Gillespie Would Give The Richest One Percent $3,200 A Year, While Giving A Minimum Wage Worker With Two Children Just $42 A Year. “The Gillespie campaign’s proposal would give the top 1 percent almost $3,200 a year, while a family of four with an income of $50,000 would get just $246 and a minimum wage worker with two kids just $42.” [Commonwealth Institute,3/16/17]

• Editorial, Washington Post: Gillespie’s Tax Cut Is “Much More Sizable For The Rich Than For The Middle Class.” “Mr. Free Lunch is Ed Gillespie, a Washington insider and veteran political strategist who would hand everyone a sizable tax cut — much more sizable for the rich than for the middle class — that would sap annual state revenues from the outset by hundreds of millions of dollars, from a general fund budget of about $20 billion. Which state programs would be slashed to pay for this? Would spending on schools be whacked? On police, parks, mental-health care or roads?” [Editorial, Washington Post, 4/18/17]

Gillespie’s Plan To Remove $1.3 Billion – 40 Percent – Of Future State Revenue Would Come Into Effect As Virginia Still Seeks To Repair Billions In State Public Education Cuts Since The Recession

Editorial, Richmond Times-Dispatch: “Gillespie Has Proposed An Income-Tax Cut, Which Also Would Reduce The Amount Of Revenue Available For Schools, Police And More.”[Editorial, Richmond Times-Dispatch, 8/31/17]

Editorial, Washington Post: “Which State Programs Would Be Slashed To Pay For This? Would Spending On Schools Be Whacked? On Police, Parks, Mental-Health Care Or Roads?”[Editorial, Washington Post, 4/18/17]

Jeff Schapiro: Gillespie Tax Plan “Would Cost Nearly $1.5 Bn A Year – Money That Now Goes To Education, Law Enforcement And The Social Safety Net.” “But so far, Mr. Gillespie has been largely silent on these questions. Instead, he has emphasised Virginia-specific issues, including a proposal to cut the state income tax. If the idea were fully implemented, it would cost nearly $1.5 bn a year—money that now goes to education, law enforcement and the social safety net.” [The Economist, 8/4/17]

Since 2009, Virginia’s K-12 Funding Cuts “Have Cost Schools Across The State About $800 Million Every Year”—That’s $6.4 Billion Over Eight Years. “Since 2009, cuts to the state’s education funding have cost schools across the state about $800 million every year. And these cuts are showing up in the form of fewer teachers and support staff, larger class sizes, and deteriorating school facilities. At this time of rising revenue lawmakers need to begin to plot a course to return the SOQ formula to where it accurately reflects the real costs of running schools and educating our kids. One-time infusions will not be enough. We need real changes that provide sustained funding so that our children, and our children’s children, can have the best opportunity for a bright future. Failure to do so jeopardizes the future of Virginia’s schools, workforce, and economy.” [The Commonwealth Institute, 1/6/16]

Gillespie’s Tax Plan Would Remove $1.3 Billion – 40 Percent – Of Virginia’s Future Revenue.[Gillespie for Governor]

Virginia Republicans Have Criticized Gillespie’s Tax Plan As “Phony Math,” And False Promises

Schapiro: Republican Legislators “Privately Worry” That Gillespie Tax Plan “Could Inflict Greater Damage On Virginia’s Budget Than The Last Big Republican Tax Cut.” “But so far, Mr. Gillespie has been largely silent on these questions. Instead, he has emphasised Virginia-specific issues, including a proposal to cut the state income tax. If the idea were fully implemented, it would cost nearly $1.5 bn a year—money that now goes to education, law enforcement and the social safety net. Republican legislators publicly laud the scheme, but privately worry that it could inflict greater damage on Virginia’s budget than the last big Republican tax cut: a rollback in 1998 of a widely despised levy on cars that forced a $1.4bn tax increase when the state’s credit rating was threatened by a deficit four years later.” [The Economist, 8/4/17]

January 2017: Republicans Killed An Income Tax Cut Proposal That Would Cost As Much As Gillespie’s. “Mindful of Virginia’s fiscal challenges, Republicans who now command that powerful committee apparently feel as Andrews did. In January, they killed an income-tax cut proposed by one of their own that by next year would cost as much as Gillespie’s. Now, some of them are OK with the Gillespie proposal.  They don’t call it the silly season for nothing.” [Richmond Times-Dispatch, Jeff Schapiro, 3/18/17]

Richmond Times-Dispatch: “Gillespie’s Plan Is Likely To Face Scrutiny From Skeptics Who Think The State Can’t Afford To Forgo New Tax Dollars.” “Coming at a time when Virginia has faced steep budget shortfalls that caused raises for state employees and teachers to be delayed, Gillespie’s plan is likely to face scrutiny from skeptics who think the state can’t afford to forgo new tax dollars. Legislation to cut tax rates was treated as a non-starter in Republican-controlled General Assembly committees this year due to the fiscal hit and a projected revenue shortfall of more than $1.2 billion.” [Richmond Times-Dispatch, 3/16/17]

• Roanoke Times: “Wagner Said Gillespie’s Proposal Also Ignores ‘The True Financial Posture’ Of Virginia.” “Wagner said Gillespie’s proposal also ignores ‘the true financial posture’ of Virginia. He said it ignores that the state recently cut more than $1.2 billion from its budget, that Standard & Poor’s, while reaffirming Virginia’s AAA bond rating, has downgraded its outlook on the state’s economy from ‘stable’ to ‘negative,’ that the state has $17 billion in pension liabilities and that the state’s rainy day fund should be $2.4 billion but is currently less than $300 million.” [Roanoke Times, 5/2/17]

Republican Senator Frank Wagner, Who Sits On The Finance Committee, Said Ed Gillespie’s Plan “Would Put Our AAA Bond Rating In Jeopardy.” “Intelligent conservatives committed to good government and low taxes have thought about cutting the income tax for years.  Unfortunately the income tax is a MAJOR source of income for the Commonwealth and it is a critical component of the revenue we need to balance the budget each year.  Tinkering with the income tax has enormous long-term fiscal implications for a state with a AAA bond rating.  Gillespie’s plan would put our AAA bond rating in jeopardy.” [Wagner For Governor, 3/16/17]

• Wagner Said Gillespie’s Plan Would “Lead To Massive Increases” In Property Taxes, And He Called Gillespie’s Claim That It Would Create $50,000 Jobs “Pie-In-The-Sky Baloney.”“If implemented, Gillespie’s plan would also lead to massive increases in local property tax rates.  His claim that his tax plan would create 50,000 new jobs is pie-in-the-sky boloney. […] Gillespie’s plan is also incredibly tone-deaf to the fact the General Assembly just closed a $1.2 BILLION revenue shortfall by cutting spending and delaying implementation of programs and other items that we eventually must pay for.  We are constitutionally required to replenish Virginia’s Rainy Day Fund – that will be the first place most new revenue will have to go.” [Wagner For Governor, 3/16/17]
• Wagner Said Gillespie’s Plan Was “Intellectually Dishonest.” “In a lengthy statement, state Sen. Frank Wagner, a longtime state lawmaker from Virginia Beach and key negotiator of the 2013 transportation revenue overhaul, called Gillespie’s proposal a ‘lazy political stunt’ and emblematic of a ‘D.C.-insider’ unfamiliar with state government. Wagner said conservatives have long wanted to cut the income tax, but have not because it’s a crucial revenue stream that keeps the budget balanced even during economic downturns. He said it was “intellectually dishonest” for Gillespie to base a plan on revenue projections that don’t take into account looming federal overhauls of health care and spending.” [Washington Post, 3/16/17]
• Wagner Said Gillespie’s Plan Relied On “Dishonest, Phony Math,” And “Washington Insider Math.” “State Sen. Frank Wagner opened up with both barrels this week on fellow GOP gubernatorial hopeful Ed Gillespie’s tax plan, saying Gillespie’s pitch is based on ‘dishonest, phony math.’ Pressed to show its math, the Gillespie campaign pointed to a think tank in the Boston suburbs and a computer model using “thousands of equations solved simultaneously” to look into the future of Virginia’s economy. It predicts a boost in household wealth and, thus, higher impact for Gillespie’s promised income tax cut. ‘Quite frankly dishonest,’ Wagner said. ‘It’s Washington math. Washington insider math.’” [Daily Press, 5/1/17]
• Wagner Said Gillespie’s Plan Ignored “The True Financial Posture” Of Virginia. “Wagner said Gillespie’s proposal also ignores ‘the true financial posture’ of Virginia. He said it ignores that the state recently cut more than $1.2 billion from its budget, that Standard & Poor’s, while reaffirming Virginia’s AAA bond rating, has downgraded its outlook on the state’s economy from ‘stable’ to ‘negative,’ that the state has $17 billion in pension liabilities and that the state’s rainy day fund should be $2.4 billion but is currently less than $300 million.” [Richmond Times-Dispatch, 5/1/17]

Former GOP State Senator John Watkins, Who Was On The Finance Committee, Said “There Are Too Many Unknowns With Regard To Making Promises Particularly Dealing With The Budget.” “Former-state senator John Watkins agreed with Wagner, and says tax reform at the federal level could also make cuts more difficult in the commonwealth. ‘There are too many unknowns with regard to making promises particularly dealing with the budget,’ he said.” [NBC 29, 5/1/17]

• Watkins: “We Tend To Be Made A Lot Of Promises From Politicians… We Can’t Depend On The Figures.” “Wagner defends his campaign’s viability though, and he was joined in a Monday press conference by retired state Sen. John Watkins, who until recently sat on the budget-writing Senate Finance Committee where Wagner remains member. ‘We tend to be made a lot of promises from politicians,’ Watkins said. ‘We can’t depend on the figures.’” [Daily Press, 5/1/17]

Plans Like Gillespie’s Have Crippled Other States And Hurt Hardworking Americans

Ed Gillespie Relies On Math From The Beacon Hill Institute To Estimate That His Plan Would Create 50,000 New Jobs. “Ed’s plan to cut taxes for all Virginians will put more money in your pocket and help small businesses create jobs. Modeling conducted by the Thomas Jefferson Institute and economists that built its tax model at the Beacon Hill Institute shows what this needed plan will do. Lead to $1,285 in additional disposable income for a household of four when fully phased in. Lead to more than 53,649 new full-time private-sector jobs – an expected 25 percent increase over current job growth projections. Lead to $304 million in new economic investment and activity. Help attract and keep people here in the Commonwealth, especially talented workers, retirees and veterans, by making Virginia more attractive and competitive.” [Gillespie for Governor, Accessed 6/15/17]

• Beacon Hill Institute Predicted Kansas’ Tax Reform Would Create 41,690 New Jobs.“There will be significant economic benefits due to tax reform. The Pass-Through Model predicts 33,430 new jobs created, $307 million more business investment and $1.6 billion in additional disposable income. The Standard Model predicts 41,690 new jobs created, $85 million more business investment and $1.8 billion in additional disposable income.” [Beacon Hill Institute and Kansas Policy Institute, Page 1, July 2012]
• Beacon Hill Institute Predicted Kansas’ Tax Reform Would Create 47,957 New Private Sector Jobs And Cut 6,267 Government Jobs. [Beacon Hill Institute and Kansas Policy Institute, Table 1, Page 3, July 2012]
• Beacon Hill Institute Predicted Kansas’ Tax Reform Would Bring In Either $533 Million Or $611.8 Million In Additional State Revenue. “There will be significant government revenue benefits of tax reform. The Pass-Through Model identifies $533 million in additional state revenue and local government would collect $395.9 million in new revenue. The Standard Model identifies $611.8 million in additional state revenue and local governments would collect $322.9 million in new revenue.” [Beacon Hill Institute and Kansas Policy Institute, Page 1, July 2012]
• Beacon Hill Institute On Kansas’ Tax Reform: “Tax Reform Will Not Result In Multi-Billion Dollar Deficits.” “Tax reform will not result in multi-billion dollar deficits. A spending reduction will be necessary but a one-time adjustment of approximately 8.5% would be sufficient to meet all statutory and constitutional budget provisions and quite likely allow real spending growth (inflation-adjusted) in future years.” [Beacon Hill Institute and Kansas Policy Institute, Page 1, July 2012]

Kansas’s Legislature Just Took Bipartisan Action To Override A Veto And Undo Tax And Spending Cuts Similar To Those Gillespie Proposes—His Model Has Failed, Let’s Not Try It Here. [Washington Post, 6/7/17]

• Plans Like Gillespie’s “Crippled States Such As Kansas And Louisiana.” “As for Mr. Gillespie, he insists his plan, which includes cutting income-tax rates by 10 percent, would barely cause a ripple — as if his $1.3 billion giveaway would simply go unnoticed, or that no programs need suffer if inflation outstrips state spending. That’s the kind of approach that crippled states such as Kansas and Louisiana, where Republican governors took a scythe to revenue, pretending the result would be an economic boom; in fact, they gutted core services and sent investors fleeing.” [Editorial, Washington Post, 4/18/17]

Washington Post: “Brownback Had Promised That The Tax Cuts Would Unleash An Economic Resurgence… Five Years After Brownback’s First Tax Cut, Kansas Has Become A Warning Sign.” “Brownback had promised that the tax cuts would unleash an economic resurgence strong enough to keep the government funded and lift people out of poverty — a similar narrative to that of Washington Republicans, who are considering a comparable plan that pairs tax reductions with steep cuts to welfare programs. But five years after Brownback’s first tax cut, Kansas has become a warning sign about what happens when promised economic growth fails to materialize, leaving families such as Emmons’s to deal with the consequences. ‘I just hope the country will use Kansas as a case study in what not to do. Because we tried it all. And it failed,’ said David Toland, who runs the community organization Thrive.” [Washington Post,6/14/17]

• Washington Post: “The Fast Growth That The State’s Tax Cuts Were Supposed To Generate Never Appeared.” “The state limited eligibility for welfare and instilled a lifetime ban on welfare recipients who broke certain rules. It dramatically lowered taxes, by reducing the number of income tax brackets in the state from three to two and slashing rates on both. It also exempted small-business income from taxation entirely — creating what analysts described as a pernicious loophole when individuals started representing themselves as small businesses to qualify. Yet the fast growth that the state’s tax cuts were supposed to generate never appeared. In each of the past five years, the pace of economic expansion in Kansas has been below that of the country as a whole.” [Washington Post, 6/14/17]
• Washington Post: “The Policies Also Blew A Substantial Hole In The State’s Budget, Turning Long-Standing Budget Surpluses Into Yawning Shortfalls.” “The policies also blew a substantial hole in the state’s budget, turning long-standing budget surpluses into yawning shortfalls. To pay its debt, the state government delayed payments to school boards and local agencies, canceled or delayed road maintenance and put off payments to pension funds.” [Washington Post, 6/14/17]
• The Budget Hole Created By The Brownback Tax Cuts Forced The State To Divert Money From Transportation And Education, The Latter Of Which Was Found Unconstitutional.“In 2015, Brownback and Republicans in Topeka increased the sales tax to raise more money. Sales taxes are disproportionately paid by the poor, who spend more of their money on everyday goods that are subject to the tax. Last year, with the reserves all but exhausted, the state drew down $400 million from other sources, the bulk of it from the highway fund, and put off making payments totaling about $200 million. It wasn’t enough. This March, Kansas’s Supreme Court ruled that the lack of support for public schools violated the state’s constitution, and ordered the government to increase funds. ‘That’s essentially lawmakers shaking the couch cushions for change,’ said Duane Goossen, the state’s former budget director.” [Washington Post, 6/14/17]
• Rural Schools In Kansas “Saw Their Budgets Fall And Class Sizes Balloon.” “Rural Kansas school systems, which were already burdened with high poverty and mental health issues, saw their budgets fall and class sizes balloon. In Coffeyville, a small town 70 miles south down a pot-holed two-lane highway from Iola, the superintendent of the school system pointed out that the cuts to the schools were themselves deeply damaging to the local economy. One of the town’s biggest employers, the school district has seen its budget fall from roughly $13 million to $11.5 million in the last nine years. ‘That’s a lot of jobs being lost in the community,’ superintendent Craig Correll said.” [Washington Post, 6/14/17]
• Former KS Budget Director: “The Damage From These Tax Cuts — The Financial Damage — Has Been So Great That It May Take Up To A Generation To Really Repair It.” “Some of the people who run the schools and community organizations in these small towns are more hopeful now that the Kansas legislature revolted against Brownback and voted to reverse his tax cuts. But even after the hike, the rich are still paying less and the poor are paying more, and it will take the state a long time to recover. ‘The damage from these tax cuts — the financial damage — has been so great that it may take up to a generation to really repair it,’ Goossen said.” [Washington Post, 6/14/17]

Kansas, South Carolina, And Tennessee Agreed To Significant Tax Increases To Meet Demands For More Revenue. “Something strange has been happening to taxes in Republican-dominated states: They are going up.  Conservative lawmakers in Kansas, South Carolina and Tennessee have agreed to significant tax increases in recent weeks to meet demands for more revenue. They are challenging what has become an almost dogmatic belief for their party, and sharply diverging from President Trump as he pushes for what his administration has billed as the largest tax cut in at least a generation.” [New York Times, 7/2/17]

• South Carolina Republicans Overrode Their Governor’s Veto And Blocked A Filibuster To Raise The Gas Tax. “Outside Washington, Republicans are discovering there are limits.  In South Carolina, Republicans overrode their governor’s veto and a blocked a filibuster to increase the gas tax.” [New York Times, 7/2/17]
• South Carolina Republicans Rejected A Series Of Broad Tax Cuts Because They Were Too Expensive. “In South Carolina, Republicans overrode their governor’s veto and a blocked a filibuster to increase the gas tax. They also rejected a series of broader tax cuts on the grounds that they were too expensive and voted instead to create a smaller tax incentive for low-income families.” [New York Times, 7/2/17]
• The Republican Governor Of Tennessee Signed Into Law The State’s First Gas Tax Increase In Nearly Three Decades. “The Republican governor of Tennessee, Bill Haslam, signed into law the first increase in the state’s gas tax in almost three decades. He defied conservative groups that said a state with a $1.1 billion budget surplus had no business asking people to hand over more of their money.” [New York Times, 7/2/17]

Kansas Republicans Overrode The Kansas’ Governor’s Veto To Increase Taxes By $1.2 Billion.“But Republican lawmakers in Kansas decided that they could cut only so much without doing irreparable harm to vital services and voted to increase taxes by $1.2 billion last month. Mr. Brownback vetoed the plan, but Republicans overrode him.” [New York Times, 7/2/17]

New York Times: “The Situation In Kansas Was, For At Least Some Conservatives, A Jolting Realization That Tax Cuts Can Be Too Blunt An Economic Instrument.” “The situation in Kansas was, for at least some conservatives, a jolting realization that tax cuts can be too blunt an economic instrument. After Mr. Brownback took office in 2011, he pursued a plan that included cuts and, in some cases, an outright elimination of taxes for businesses and individuals to help invigorate the state’s underperforming economy.” [New York Times, 7/2/17]

• Kansas Republican On Congress Slashing Tax Rates: “Don’t Do It.” “In Kansas, the predicted economic bloom did not materialize. Employment and economic growth have lagged far behind the rest of the nation. The state treasury had so little money to spread around that the Kansas Supreme Court found that the state’s spending on public education was unconstitutionally low.  ‘If there were three words I could say to Congress right now,’ said Stephanie Clayton, a Republican state representative from a district in the Kansas City area, ‘they would be, ‘Don’t do it.’” [New York Times, 7/2/17]

Kansas Republican On Tax Cuts Creating An Utopia: “That’s Not How It Works, As It Turns Out.” “She criticized what she said was a desire by her party to be more faithful to the principle than to the people Republicans were elected to help. Mr. Brownback and many conservatives, she said, overpromised on the tax cuts as a ‘sort-of Ayn Rand utopia, a red-state model,’ citing the author whose works have influenced the American libertarian movement.  ‘And I loved Ayn Rand when I was 18 — before I had children and figured out how the world really works,’ Ms. Clayton added. ‘That’s not how it works, as it turns out.’” [New York Times, 7/2/17]