Kansas Treasurer Copes With Brownback’s Tax Cuts: Five QuestionsRomy Varghese
Ron Estes says he has a compelling reason to monitor Kansas’ finances as the state treasurer. His name is on the checks and he doesn’t want any to bounce.
The 57-year-old Republican is keeping busy as revenue for the year ending this month has come in lower than expected, partly thanks to income-tax cuts in 2012 and 2013. From 2013 through 2019, the tax changes would result in the loss of at least $6.8 billion, the state’s legislative research department said. Moody’s Investors Service in April lowered the state’s rating one step to Aa2, third-highest, saying the cuts haven’t been fully offset by reduced spending.
Estes, who as a boy baled hay and fed cattle at his family’s farm, is running for a second four-year term in November.
The following is condensed from a recent phone interview:
Q: Did you still support Governor Sam Brownback’s income tax-reduction plan?
A: I am cautiously optimistic that it’s going to work. The plan originally was designed so that over a three to four-year period we’d see an increase in economic activity. We’re really in the middle of the process. We’ve had some disappointing news the last couple months in terms of the revenue being a little bit lower. We’ve got to make sure that we maintain our fiscal responsibility and don’t spend too much until we get to see how it plays out over the next year or two.
Q: How does the lower Moody’s rating affect the state?
A: I have complete confidence that Kansas is going to pay its bills. The slightly lower rating is going to affect us a little bit if we have future bonds. It’s a little bit of an extra cost that we’ll have to incur. It’s just a few basis points.
Q: What has Kansas done to bolster its pension system, which was 56 percent funded in 2012?
A: We set up a cash balance plan for new employees starting in 2015. And we’ve increased contribution levels for existing employees and for the state and local governments so that they will contribute more over the next few years. We’re now on a path that over the next 20 years, we’ll get back to 100 percent funding. We bit the bullet.
Q: Has the Tea Party had a positive effect nationally?
A: The Tea Party has been very good for the country. It’s at least opened the dialogue of how big do we want government to be. Because for 30 or 40 years, we were on a path of government continuing to grow. In 2010, a lot of folks stood up and said, this really isn’t what the role of government is supposed to be. It’s supposed to be limited. When you start to have a debate, sometimes there’s a lot of turmoil as you go through that change process.
Q: Your family raises about 60 head of cattle and grows wheat, corn and soybeans on 700 acres in Osage County. Are there any farming lessons that can be applied to your work as treasurer?
A: You have to make an investment in the future. You put the time and effort into buying the land and planting the crops. You don’t know exactly what the weather is going to be, but you know that there’s growth that can happen. You’re actually looking forward to the future and to future return. That’s a lesson we all need to know.
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