What is the economic issue facing the school system in Kansas? Are you able to i

Question

What is the economic issue facing the school system in Kansas? Are you able to identify the types of government policies that have been implemented that have led to the issues? What do you think may have been the motivation behind implementing the government policies? What are some of the current and future economic benefits and costs of the policies implemented? Please make reference to economic concepts and how they apply to this scenario. Include data and/or graphs in order to maximize your score.

Explanation / Answer

Kansas enacted massive tax cuts and eased the regulations for the industry.Govenor Sam Brownbackwas the main architect of this economic policy. The huge tax cuts were proposed in the name of  Brownback tax bill. This was proposed to take the state in he growth path by increasing the investment and creating employment. However contrary to that it has created huge revenue losses to the state. In reaction to that the Governor has proposed auterity measure and cut the spending in education and infrastructure.

In this context Kansas school system is the worst effected due to these austere measure. The funds are not provided adequately for the schooling . The state faces $2.5 bn dollar deficit in the year 2018 under the new plan and it will take out $18000 from each class room. This has led to massive migration of teachers from the kansas state and the environment is not conducive for the recruitment of new teachers. There was deficit of $290 mn for the school funding, the $50 mn additional funds provided by Sam Brownback is not adequate.

B) The types of government policies that are implemented are of neo classical economic growth theories and the theories that propose the tickle down approach. The exogenous growth theories propose that the factors external like capital , technology and labour productivity will lead to the growth path. So the state has reduced the tax rates and provided incentives to the industry to propell growth.

C) The motivation behind implementing the Government policy are :

Government has takend decision to reverrse the economic downturn by providing a environment favourable for investments. In order to do so it cut the taxes. The tax revenues were reduced 22 % than the previous years due to this. The belief of the Governor in the tickle down approach, where by educing taxes the people will afford more for the edcation and health is one of the reason for this policy. The employment generation and growth are main motivating factors.

D Some of the current and future benefits of the policies implemented are :

1) The reduction in state spending in education will have adverse effects in short run as the middle and low income groups can not afford. But as the employment is generated and real income rise. spending will increase.

2) The state budget deficit will be reduced due to the cuts.

3) This wil lead to more freedom of choice to the people to choose the kind of education and quality of education.

4) This will lead to less government as governments interference can be reduced.

How ever it has huge economic costs :

1) The affordability of education to poor will be difficult, because the state has provided avenues to raise the fee and the state funding has reduced.

2) The human capital creation suffers which will lead to reduced productivity of the labour. According to endogenous growth model this will hamper growth.

3) The Kansas tax plan collapsed the state’s three individual marginal income tax rates of 3.5, 6.25, and 6.45 percent down to two rates of 3.0 and 4.9 percent, this reduced rates have led to the revenue loss for the state.The middle income and the poor have not accured any benefits from this tax cuts.

4)After the Brownback tax cuts, contrary to the booming Kansas witnessed decline in state revenues, sluggish growth, and brutal cuts to government programs.It is to note between 2013 and 2016, Kansas’ real gross domestic product only grew by 3.8 percent, while national GDP growth was nearly double that at 7 percent.

5) It projected around a Budget deficit of $2.5 bn in 2018.

Dear student , please add additonal data if required in the broad frame work given.

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