"What's measured, improves."
So said management legend and author Peter F. Drucker about the value of using metrics to define specific objectives within an organization.
Drucker is no longer with us; if he were, he might want to have a few words with Republican Governor Sam Brownback of Kansas. Brownback, despite promising to measure the results of a "real life experiment" in cutting taxes, has decided to cancel a quarterly report on the status of the state's economy.
Although Brownback's spokeswoman said "a lot of people were confused by the report," no one has been fooled. The problem was that the reports didn't match the governor's predictions for the state's soon-to-be-booming economy. Local news media, including the Topeka Capital-Journal and the Kansas City Star, flagged the abandonment of the reports as evidence not only of policy failure, but as an attempt to hide that fact from the public.
A quick refresher: In 2010, Brownback, a U.S. senator, ran for governor on an economic platform created by the American Legislative Exchange Council, a conservative group that specializes in promoting draft legislation. He promised to slash taxes on business owners and lower personal income tax rates, unleashing an economic renaissance in Kansas.
In May 2012, he signed the bill into law. It initially lowered the top personal tax rate to 4.9 percent (it's now 4.6 percent) from 6.45 percent, but most importantly, it eliminated income tax on profits for owners of limited liability companies, subchapter S corporations and sole proprietorships.
Give Brownback credit for passing the exact legislation he had promised.
The results, however, haven't been very encouraging. Indeed, since the tax cuts were passed, almost nothing has gone as promised in Kansas. Revenue plunged and the state resorted to pulling money out of its rainy-day fund to plug the holes. A number of critical services, including for road maintenance and schools, were cut. The business climate has been poor, and the economy has lagged behind neighboring states as well as the rest of the country.
Why hasn't this worked out? As we have discussed before, the failure of the Kansas tax cuts to do what was promised is a simple combination of state budget math and human psychology.
The math is simple: Tax cuts tend to reduce revenue, in Kansas' case much more than expected. To change people's behavior requires more substantial incentives than changing things by a few percentage points. The reduced revenue led to spending cuts that lowered quality of life. In response, rising numbers of people and companies have leftthe state.
