When all is said and done, the biggest loser in the rush to keep up (or keep down, I guess) with Kansas’ folly of dramatically cutting business and personal income tax will be education.
If Senate Bill 26 passes and withstands a potential veto from Gov. Jay Nixon, the state will lose millions of dollars in revenue with no alternate plan for replacing those funds. It’s a lose-lose situation.
According to The Missouri Budget Project, SB 26 would lead to a loss of $960 million from the general state budget. That amount equals 32 percent of state funding for K-12 school districts and more than $100 million MORE than all funding from the state to four-year and two-year public colleges in the fiscal year that began July 1.
Based on the state’s own formula for funding school districts, Missouri is already $620 million below its adequate funding level. The debated tax cuts, according to MBP, “will ensure that Missouri will never fully fund its schools and will likely result in further cuts to state support for local schools.” Public colleges and universities are $292 million BELOW the funding level of 2001—and that was 12 years ago. Add the funding loss from SB 26 and prepare for “additional steep tuition increases to make up for likely reductions n higher education.”
Thanks to the Hancock Amendment, the state’s legislators can cut taxes—but once they realize the mistake, they cannot go back and undo the fiscal damage.
Missouri already lags behind most states in funding for K-12 education. According to a 2009 U.S. Census Bureau ranking of financing for elementary and secondary public schools, Missouri ranks 37th in the nation. The $10,457 spent per pupil includes federal, state, and local sources of revenue. Missouri ranks even lower at 41st if only state spending is considered, at a paltry $4,370 per student.
The state will certainly plummet in state funding if SB 26 is adopted into law, which will then put Missouri near the absolute bottom in resources for education.
You don’t need to be a math major to realize that will add up to disaster.
Interestingly, the votes that would make SB 26 a reality will come mostly from rural legislators. Their respective districts will be devastated by more education cuts, because of lower personal property taxes in comparison to suburban school districts.
There is no evidence that Kansas will ever recover from its decision to slash income taxes. As a result, that state’s legislature is debating cutting $25 million to $30 million from six major universities and its technical and community colleges. Higher education is being targeted in Kansas before K-12, but it’s only a matter of time before local public school districts are strangled financially.
The same will be true in Missouri if SB 26 passes. Many of our so-called leaders will then wonder why there isn’t a rush to move business or families to Missouri.
There is a steep cost for cutting education, and it will be much higher than our legislators understand.
Commentary by Alvin Reid
