Like many basic statistics, its easy to take this number and proclaim that Kansas’s economy is doing great, like the Kelly administration has several times before with other economic results. According to the Bureau of Labor Statistics, in February 2024, Kansas gained 3,800 private-sector jobs. But with some tighter scrutiny, Kansas’s economy is far from being as competitive as the governor claims.
Just one month before in January 2024, Kansas lost 2,300 private-sector jobs, bringing the state back to around the job numbers it had last fall. This yo-yo effect isn’t new and we’ve stayed around 1.187 million private-sector jobs for much of the last year.
Compared to other states, Kansas’s growth isn’t impressive. Kansas’s February 2024 job numbers are 2.4% higher than the pre-pandemic job numbers in January 2020. 28 other states across the country have had higher growth since then. Utah had 11.6% growth. Idaho was at 12.8%.
Going back further, Kansas ranks 41st in private-sector job growth between 1998 and 2023, coming it at 10.6% growth. The 50-state total was 25.4%. The ten states with the best economic performance in the country between 2012 and 2022 had a total percent change in private-sector jobs of 48.5%, while the bottom ten states had a total percentage change of only 9.1%. States without an income tax had a total growth rate of 49.7%, while those that do had a total growth rate of 19.9%.
In the marathon of job growth, Kansas can pick up its pace every once in a while but has been lapped several times over by other states that have reformed their economies to promote growth. The Kansas legislature still has several weeks until it finalizes its work for the year, but tax reform has been hotly debated and there hasn’t been a conclusive passage to path both houses and be signed by the governor.
In Idaho in 2013, 90% of businesses were exempt from paying the personal property tax, shortly after large tax cuts in 2012. In 2022, Idaho passed a flat tax rate on the corporate and individual income tax at 5.8% during a special session because of high collections. By comparison with its neighbors, Kansas has the highest corporate income tax rate in the region.
North Carolina is the sixth highest destination for domestic migration and has a booming economy whose private-sector job levels are 8.5% higher than in January 2020. That largely stems from a decade of tax reform, starting with reductions of the corporate income tax rate with a phase-out planned by 2029 and then a flattening of the income tax to 5.8% in 2014 and later 4.99%. These bipartisan reforms have resulted in an influx of venture capital investment, job growth, and prosperity. A low cost of living and affordable housing have helped in the move, but free-market reforms like changing exclusionary zoning laws and reducing prohibitive regulation are key to keeping homes built at an affordable selling price.
Governor Kelly often touts a statistic that Kansas is “#1 for Private Investment,” largely due to the Panasonic plant pinned as a $4 billion investment in De Soto. The price tag and efficiency of this project is still in question though. Panasonic has promised 4,000 jobs from their DeSoto plant, paying an average of $50,000 each annually. That’s $200 million, but still pales in comparison to the billions of taxpayer dollars to make that happen – $2 million per job to be specific. The Panasonic deal had no wage or hiring requirements, indefinite nondisclosure agreements, and confidential investment details. Flaunting the private investment numbers is like paying for a participation trophy out of the taxpayer’s wallet while significant changes to job and wage growth in the state aren’t present.
A further breakdown of Kansas’s economics compared to other states will be released in the upcoming 2024 Green Book.
