Meg Wiehe, state tax policy director at the nonpartisan Institute on Taxation and Economic Policy, says Kansas’ tax cuts are “definitely the number-one reason the state faces a big budget gap.” And in Wisconsin, she adds, it is that, as the national recession ended and state revenues ticked up, Walker “enacted some permanent tax cuts” instead of paying off debt, investing in education or infrastructure or setting the money aside in a rainy-day fund.
“We saw this in a lot of states: this sort of run to ‘Oh, my God, we have a [revenue] surplus coming in! Let’s blow it all on tax cuts!'” Wiehe says. “There are multiple problems with that,” including budget forecasts built on economic expectations that, in general, don’t pay off.