When it comes to steering its economy into the toilet, Kansas is in a league of its own
Kansas lawmakers, no strangers to bad economic news these days, got some context for the state’s struggling budget: the Sunflower State last year suffered the third worst revenue drop in the United States.
The U.S. Census Bureau says in a new report that Kansas joined Alaska and Delaware as the three states showing the most precipitous drops in overall tax collections.
Kansas reeled in $7.3 million billion in 2014, a 3.8 percent drop from the year before. Delaware’s tax revenues dropped 5.1 percent, but at least that state has some good news to offset the bad: A separate report out by the U.S. Census Bureau shows that Delaware had the fastest rate of employment growth from 2012 to 2013.
Kansas’ budget woes, as everyone knows by now, is due to Gov. Sam Brownback’s 2012 strategy of scratching off income taxes for certain business partnerships, sole proprietorships and companies structured as subchapter S corporations.
In 2013, Brownback boasted that he wanted Kansas to compete with Texas. Texas, however, is winning that battle in the same way that the St. Louis Cardinals might stack up against the Bad News Bears. Texas, in the same Census report, has seen its tax collections increase 6.7 percent, third highest in the country behind New Mexico and North Dakota. Texas last year was also leading the nation in job growth at all pay levels.
States like Texas and North Dakota have dynamic economies. Both have been fueled by oil and natural resource booms. Kansas, meanwhile, continues to try to find an economic identity. Is it an energy state? Not compared with some of its neighbors, like Colorado. Is it an agriculture state? Perhaps not, particularly if Kansas lawmakers are considering major increases to agricultural property-tax assessment rates.
Gimmicks, like using tourism tax incentives to lure companies like Dairy Farmers of America to Wyandotte County, won’t sustain the state economy. Nor will Brownback’s bid to raise consumption taxes on purchases of tobacco and liquor products.
Reports over the weekend suggest that some of Brownback’s closest allies may break with him and consider exploring a re-examination of the 2012 tax plan, which would be long-awaited good news for Kansas.
