May 11, 2016
When it comes to jobs and income tax revenue, Kansas is the flip side of its neighbors. Kansas’ job growth is behind the region and, compared to the period before the tax cuts, our income tax revenues haven’t recovered. Meanwhile, the region sees healthy growth. This matters because we were told revenue losses from the tax cuts would be recovered by explosive job creation.
Kansas’ fiscal faultiness is of its own creation. Other states aren’t experiencing it. That fact, however, has not stopped attempts to make such a claim. Relative to the first three-quarters of the year before the tax cuts went into effect (2012), Kansas’ experience couldn’t be more different from the rest of the region.
Neighboring states have had more income tax revenue to make the public investment that improves quality of life. They’ve been able to support schools, safe communities, health care, roads, and other essentials. Kansas, meanwhile, is seeing income tax revenue 11.6% below before the tax cuts were enacted.
The kicker to all this lost revenue is that it was done in the name of making Kansas the place for jobs and economic opportunity. What has transpired since the tax cuts has been anything but. Whether looking at private-sector job growth or all job growth, Kansas is getting beat. In the six-state region (which includes Arkansas, Colorado, Iowa, Missouri, Nebraska, and Oklahoma), Kansas is second from the bottom in both total and private job growth since the tax cuts went into effect. According to proponents of the tax cuts, this wasn’t supposed to happen. Our revenue problems were supposed to be temporary, once steroidal job growth hit the state. Instead, Kansas is coming close to scraping the bottom of the barrel – both on state finances and job creation.
Kansans are reflecting on a lot lately. From Goodland to Gardner, people across Kansas are contemplating what the future of our state may be.
The legislature has now adjourned and the current budget doesn’t address where we need to be now let alone five, 10 or more years from now. Kansas is continuing cuts to economic drivers like higher education. Another $185 million is being swept from highways, delaying many projects over the next few years. The Department of Health and Environment faces $35 million in cuts that will affect vulnerable Kansans, and a $96 million pension contribution from the state has been delayed until June 2018.
As things stand now, planning for a prosperous future that benefits all Kansans is virtually impossible and it shows with the short-sighted budget chock-full of temporary fixes to end the 2016 session.