2023 Green Book: Kansas stagnates while others grow
At the end of 2022, 30 states across the country had fully recovered to their level of private-sector jobs prior to the COVID-19 pandemic. Kansas was in the minority that failed to do so. While the state continues to doll our hundreds of millions of dollars in megasubsidies to huge corporations, the Sunflower State continues to fall behind states that have prioritized relief for all and reducing the burden of government. The 2023 Green Book lays out the facts.
As jobs and wages in a state grow, so do the opportunities for everyday people to find high-paying work that can support their families. Long-term growth is the best way states can create the best standards of living for their citizens.
According to the Bureau of Economic Analysis, between 1998 and 2021, Kansas’s private sector jobs grew by 13.2%, ranking it at 44th in the nation. By comparison, the number #1 spot of Utah has grown by 76.8% in that same time period. Kansas’s neighbor of Colorado ranked 8th and grew by 46.1%. Slow growth occurred with wages from 1998 and 2021 as well: Kansas ranked 37th with its wages growing by 116%. Utah was again at #1 with 257% growth. Kansas was in the bottom percentile for GDP growth as well.
At the same time, Kansas spent an average of $4,932 per resident, which was $324 higher than the 50-state national average. This is to pay for Kansas’s distinction as having the eleventh-highest rate of state employees per capita.
67 of Kansas’s 105 counties saw county property tax collections more than double despite a decline in populations since 1997. While Truth in Taxation legislation has helped limit property tax growth in 21 counties and keep increases below 3% in another 47 counties in 2022, overcoming the two-decade trend is no easy task. Property taxes are also high across the state. When compared with similarly sized rural towns across the country, a city the size of Iola has the highest property tax on commercial properties and the second-highest property tax on industrial properties in the nation.
The relationship between the size of government and economic growth is as true today as we first wrote for the Wall Street Journal in 2012 – States that spend less, tax less…and grow more. Kansas’s high taxes support the big size of state and local government. The consequence of these taxes is that people and businesses choose to move and establish their places of work elsewhere.
The Green Book tries to capture this distinction by comparing states with and without an income tax. The biggest change this year happened in spending per resident. In 2021, states that tax income spent 80% more per resident than states without an income tax: by comparison, that number was 52% last year. According to the BEA again, between 1998 and 2021, private-sector jobs in non-income taxing states grew by 56.8% compared to 25.0% in income-taxing states. Over the same time period, wages in non-income taxing states almost tripled, whereas in income taxing states, it grew only 2.4 times.
As jobs and wages in a state grow, so do the opportunities for everyday people to find high-paying work that can support their families. Long-term growth is the best way states can create the best standards of living for its citizens.
State and local governments have to provide the same basket of goods – infrastructure, public safety, schools, social services, etc. That 80% difference in spending comes from how states and their local governments choose to spend. States can find ways to provide better products at a better price and not have to tax highly.