The 2023 domestic migration data released last week by the Internal Revenue Service shows that Kansas lost $361 million in adjusted gross income (AGI) from U.S. residents moving in and out of the state. That is a smaller loss than in 2022, but more than was lost in 2020 and 2021.
Johnson County elected officials routinely brag that the county is the economic engine of the state, but it lost $125 million in AGI in 2023 due to domestic migration. That’s the fourth consecutive year that Johnson County recorded a net loss, and the net loss over the last five years is $572 million.
The counties of Sedgwick, Wyandotte, Shawnee, and Douglas also continued to post net losses due to domestic migration, while Leavenworth County had a small gain of about $10 million.
Overall, Kansas lost $1.8 billion in AGI over the last five years.
Subsidies won’t change long-term economic stagnation or domestic migration loss
Governor Laura Kelly declared that the $1 billion handout to Panasonic would transform the state’s economy, but it’s no surprise that that hasn’t panned out. Despite being in the fifth straight decade of economic stagnation, subsidies remain the bipartisan preference of state and local elected officials.
Income tax reform passed by Republicans in 2024 was a step in the right direction, but it had to be tempered to avoid Kelly’s veto. Kansas still has uncompetitive income, sales, and property tax rates, and this will remain the case until state and local government spending is curtailed to reduce taxes.
The states with the lowest tax burdens have far superior growth in private-sector jobs and GFP, and they are gaining population from domestic migration.
Spending control is the key because states that spend less can tax less and grow more. Both sides talk about supporting efficient spending, but there remains bipartisan resistance to rolling spending back to reasonable levels.
This table from our Responsible Kansas Budget makes that painfully obvious. State spending is about $10 billion higher than it would be if it had increased for inflation and population growth since 2005. Spending has skyrocketed since 2020, and the blame falls on both parties.
Many Republicans say they are cutting spending when, in reality, they are only shaving a little off of Governor Kelly’s budget. Most Democrats blame profligate spending on the Republican majority, but it’s pretty well understood that they vote against budgets because the state isn’t spending enough.
It’s long past the time to stop trying to disprove Einstein’s definition of insanity and get down to the hard work of making better use of taxpayer money. Until then, we can watch more people and their incomes leaving Kansas.
