In 2012, Kansas lawmakers slashed income‑tax brackets and even set the rate for many small businesses to zero. The plan sounded like a boost for growth, but it left the state’s coffers thin. By 2014, general‑fund receipts had dropped by about $600 million – a hit that the state could not recover with ordinary economic growth.

At the same time, lawmakers raised spending by nearly $380 million in the budget that passed just before the tax bill. Cutting taxes while piling on new programs is not a recipe for prosperity, yet both parties approved the increase. When revenue fell short of forecasts, the state turned to promised “efficiency” studies that identified $2 billion in savings over five years. Only a fraction of those cuts were ever made.

The consequences were real: public schools faced budget gaps, mental‑health services stretched thin, and the state had to divert $1. 4 billion from transportation projects for short‑term relief. Some of these problems predated the tax cuts, but the reduced revenue limited Kansas’s ability to respond.

External shocks made matters worse. The state’s main industries – farming and oil – suffered sharp price declines between 2014 and 2016, further squeezing the budget. Kansas’s job growth lagged behind national averages, and net migration turned negative as people moved elsewhere.

Other states have lowered taxes without the same crisis. Indiana, North Carolina and Tennessee trimmed or eliminated income‑taxes yet avoided a budget collapse. The key lesson is that tax cuts must be paired with responsible spending and genuine efficiency gains, not just paperwork.

Missouri’s current governor is talking about a gradual elimination of the state income tax, funded partly by higher sales taxes. The debate now is whether that plan will balance the books and who will shoulder the cost. Kansas’s experience shows that cutting revenue without tightening spending can backfire.

Kansas Tax Cuts Show Why Spending Matters

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