More About Michael Leachman

Michael Leachman

Michael Leachman joined the Center in July 2009. He is the Director of State Fiscal Research with the State Fiscal Project.

Full bio and recent public appearances | Research archive at CBPP.org


More Bad News for Backers of Kansas Tax Cuts

November 21, 2014 at 10:42 am

The latest projections from Kansas’ nonpartisan Legislative Research Department bring more bad news for those who hoped Kansas’ massive tax cuts would generate an economic surge.

The department predicts that personal incomes will grow more slowly in Kansas than in the nation as a whole this year and will continue to lag behind the national rate in 2015, 2016, and 2017, by wide margins (see graph).

This isn’t what tax cut proponents predicted.  Governor Sam Brownback said they would be “a shot of adrenaline into the heart of the Kansas economy.”  The Heritage Foundation’s Stephen Moore, who helped design them, said the economic benefits would be “near immediate and permanent.”

Faced with the state’s unimpressive economic performance since the tax cuts took effect, proponents now claim they just need a little more time to work.  But the new forecast, combined with last week’s announcement that Kansas’ budget has fallen much further into the red than previously acknowledged (because of the tax cuts), casts further doubt on those claims.

This shouldn’t be a surprise.  History suggests that deep cuts in personal income taxes are a poor strategy for economic growth, and the serious academic literature typically finds little relationship between a state’s tax levels and its economic performance.  So there’s no reason to think that the tax cuts will cause Kansas’ economy to boom in the future.

How Has State K-12 Funding Fared in Your State?

November 5, 2014 at 3:00 pm

This interactive map shows the change — in both dollars and percent — in state general K-12 funding per student since 2008.  As our recent report explains, funding is below pre-recession levels in at least 30 states, after adjusting for inflation; in 14 states, the decline exceeds 10 percent.  While most states are providing more funding per student this school year than they did a year ago, funding generally hasn’t risen enough to fully offset earlier cuts.


State K-12 Funding in 80 Seconds

November 4, 2014 at 9:47 am

Most states continue to spend less — often far less — per student in general funding for kindergarten through 12th grade than they did before the recession began seven years ago, as our latest analysis shows.  These cuts have serious consequences for students, schools, and jobs.  This short video explains what states should do to ensure that children have the education to succeed in the global economy.

Debating Kansas’ Tax Cuts

October 30, 2014 at 1:10 pm

With Kansas’ radical tax cuts drawing national attention this election season, I recently debated the Heritage Foundation’s Stephen Moore, who advised Governor Sam Brownback on the tax cuts, on their impact.  The full debate, published by State Tax Notes and moderated by its commentary editor Doug Sheppard, is here.  Below is a brief excerpt:

Leachman:  In 2012 you and Arthur Laffer wrote, ‘‘The quality of schools also matters as does the state’s highway system, but it takes years for those policies to pay dividends, while cutting taxes can have a near immediate and permanent impact, which is why we have advised Oklahoma, Kansas, and other states to cut their income tax rates if they want the most effective immediate and lasting boost to their states’ economies.’’  Why — 18 months after the income tax rate cuts were implemented — isn’t Kansas’s economy performing better?

Moore:  It’s a little early to tell about Kansas.  A 1.5 percentage point tax cut isn’t going to turn this Midwestern state into Beverly Hills or Boca Raton.  If Kansas can continue to get the rate down to close to zero, we would expect to see some strong growth effects.  Our advice to Brownback is full speed on the tax cuts.

Leachman:  The total income tax cut in Kansas was very large, equaling at least 9 percent of revenues this fiscal year.  It’s hard to expect a state to do more than that.  And again, Moore said cutting income taxes is the most effective way to immediately boost state economies.  Hearing now that they’ve got to do substantially more tax cutting before they’ll see strong growth effects has got to be disappointing to people who believed in the Kansas experiment.

And here’s part of my final statement in the debate:

Kansas followed Moore’s simplistic advice:  Slash your income taxes and your economy will surge.  But that advice is wrong.  And now, Kansas’s finances are in shambles, its economy is ho-hum, and its future looks worse — not better.  Other states that follow this path can expect a similar result.

This debate is not really just about Kansas.  Other states have passed — more recently than Kansas — irresponsibly large income tax cuts under the guise of economic revitalization.  The tax cuts enacted by these other states — Missouri, North Carolina, Indiana, and Ohio, for example — are not much different from Kansas’s.  While none were as big as the Kansas cuts, they generally included many of the same ingredients.  At their core is big cuts in income tax rates for the highest-income households to be paid for with cuts in funding for schools and other public services key to future economic growth, and often tax increases for low-income families. . . .

Economic growth will not save these states from further diminishing their education systems or other important public services — services already damaged by the Great Recession and its aftermath.  And as in Kansas, there’s no reason to think the tax cuts will cause these states to see their economies boom in the years ahead. . . .

Lasting School Cuts Endanger Critical Reforms

October 17, 2014 at 10:27 am

States have imposed large cuts in general education spending — as our new report details and I explained yesterday — with serious consequences for students, schools, and the economy.  Deep state funding cuts have led to job losses, slowing the economy’s recovery from the recession.  Such cuts also have counteracted and sometimes undermined important state education reform initiatives.

School districts began cutting teachers and other employees in mid-2008, when the first round of budget cuts began taking effect.  By 2012, local school districts had cut about 330,000 jobs. Since then they’ve added back some of the jobs, but they’re still down 260,000 jobs compared with 2008 (see chart).

Deep cuts in state spending on education — including those job cuts — can limit or stymie education reform efforts.  Reforms endangered by funding cuts include:

  • Recruiting better teachers.  Research suggests that teacher quality is the most important school-based determinant of student success.  So recruiting, developing, and retaining high-quality teachers is essential to improving student achievement.  These tasks are more difficult when school districts are cutting their budgets.  Teacher salaries make up a large share of public education spending, so funding cuts inevitably restrict districts’ ability to expand teaching staffs and supplement wages.
  • Trimming class size.  Evidence suggests that smaller class sizes can boost student achievement, especially in the early grades and for low-income students.  Yet, small class sizes are difficult to sustain when schools are cutting spending and enrollments are rising.  Kansas schools, for example, have 19,000 more students than they did in 2009, but 665 fewer teachers.
  • Expanding learning time.  Many education policy experts believe that more student learning time can improve achievement.  Budget cuts make it more difficult to extend instructional opportunities because extending learning time generally adds costs.  Some states have even reduced student learning time because of budget cuts. Arizona, for example, eliminated state funding for full-day kindergarten, to which some school districts have responded by offering only a half-day program or by requiring parents to pay a fee for a full-day one, likely reducing the number of children who can attend.
  • Providing high-quality early education.  A number of studies conclude that pre-kindergarten or pre-school programs can improve cognitive skills, especially for disadvantaged children, but most states cut funding for those programs after the recession hit.  Of the 40 states that provide funding to preschools, 28 had reduced per-child funding as of the 2012-13 school year — often by large amounts.  (States typically support their preschool programs outside of their general K-12 “formula” funding, so these cuts come on top of those documented in our new report.)

These recent cuts may cost states much more in long-term economic growth than they save.  The cuts that states have enacted will weaken the future workforce by diminishing the quality of elementary and high schools.  At a time when the nation is trying to produce workers with the skills to master new technologies and adapt to the complexities of a global economy, large cuts in funding for basic education undermine a crucial building block for future prosperity.