Comparing County Budgets to Address Shortfalls, Drive Efficiency, and Spur Opportunity
The public health and economic impacts of COVID-19 have severely affected county budgets. The pandemic has intensified an on-going storm; counties are losing populations, some areas have the highest effective property tax rates in the nation, and now, most county governments have budget shortfalls. But make no mistake – this is not evidence of a revenue problem, but a spending problem.
Spending at the county level is often ignored while budget disputes happen at the state and federal level. As shown in our annual Green Book, Kansas is massively over-governed, having fewer residents per government unit than 47 other states. The state also has the 2nd highest share of local government workers per capita, and its bloated public sector leads to Kansas having some of the highest local taxes in the country. Fortunately, comparing the spending of all 105 counties in Kansas, plenty of opportunities exist to save money without cutting county services.
Reducing local government spending isn’t ‘just’ about making better use of taxpayers’ money; the economic survival of many small towns and cities may well depend upon it.
The Bureau of Economic Analysis says eight of the ten most populous Kansas counties are among the slowest growing economies in the nation, and seven of the ten largest counties are above the 50th percentile in government growth. Kansas also has some of the highest tax rates in the nation. According to the Tax Foundation, Kansas has the 9th highest combined state and local sales tax rate, and the 9th highest marginal income tax rate on passthrough businesses, which employ 57% of the state’s private workforce. The Lincoln Land Institute also says Kansas has some of the highest effective property tax rates in the nation. Given these sad rankings, it is not surprising that the U.S. Census says Kansas has a net loss of almost 180,000 people who moved away over the last 20 years.
These trends will only worsen if cities and counties raise taxes to balance their budgets, likely made worse amidst the COVID pandemic, instead of reducing costs. Further analysis included breaking counties into six groups based on resident populations. As an example, in the small county population group (less than 3,000 residents) total spending per resident estimates ranged from a low of $1,800 to over $5,700. This begs the question – what accounts for the $3,900 per resident difference in counties of similar size? In fact, these large discrepancies are present in every county population group. While this report does not highlight all factors that could explain the differences in county spending, it provides enough information for Kansans to ask questions of their local officials’ fiscal management. If county governments can save taxpayers thousands of dollars by merely recognizing and replicating their neighbors’ efficient fiscal management, then tax rates can be lowered. Savings are possible if government budgets are open and transparent. In the future, Kansans should have far easier access to information that is uniformly tracked and reported. Taxpayers make government possible, and they deserve a more significant voice in how their tax dollars are spent.