Kansas has been simmering in economic stagnation for decades, trailing behind national averages in job growth, population increases, and economic growth. Like a poorly tended grill, high taxes and selective business subsidies have smoked out potential growth, leaving stagnation rather than sustenance.
From 1979 to 2022, Kansas’s private job growth was just 53% compared to the national average of 88%. Imagine the vibrancy of having an additional 451,000 jobs in the state—jobs that could have been fostered with more competitive tax policies.
Kansas has seen a net exodus of nearly 198,000 residents since 2000, driven away by an unwelcome tax environment. The states with the lowest tax burdens saw an influx of 4.6 million people from domestic migration during the same period, while the high-tax states watched 10.7 million residents pack up and leave. According to recent IRS data, Kansas lost $2.1 billion in adjusted gross income due to people moving elsewhere since 2017.
The Kansas Policy Institute’s Green Book shows per capita spending of $4,941 in 2022 was substantially higher than in states with no personal income taxes ($3,283) and the ten best economic performance ($3,543). States with lower tax burdens have had better job growth and economic activity.
Between 1998 and 2022, the ten states with the lowest state and local tax burdens averaged 51% growth in private-sector employment versus 34% for the ten states with the highest burdens. Kansas, ranked 44th during this period, achieved just 16% growth. Furthermore, Kansas’s high spending per person translates to higher taxes, ultimately burdening its citizens and hampering economic growth.
More recently, Kansas’s unemployment rate ticked up to 2.9% in May 2024, a slight increase but a revealing one. The total nonfarm payroll employment saw a marginal uptick by 100 jobs. Beneath this weak report, there was more weakness as the private sector lost 300 jobs while the government added 400 jobs. This isn’t growth; it’s a reshuffle at a high cost to private-sector workers. Over the past year, Kansas has seen an overall increase of 24,000 jobs, with the private sector contributing 18,700 and the government sector adding 5,300, or about 20% of the total.
During the recent special session, the Legislature passed several measures to boost the state’s economic prospects. One notable legislative action was passing a multi-billion dollar STAR bond to attract major sports franchises, especially the Chiefs and Royals from Missouri, just a few miles away. Investing in sports is like predicting Kansas weather—unpredictable and always exciting. There is potential for economic rain, but this will likely put you in a financial storm instead.
Moreover, the recent special session saw efforts to provide broad tax relief, with the key being reducing tax brackets from three to two, which is a correct step toward a flat income tax. These changes could significantly impact Kansas’s economic landscape, reducing the tax burden and potentially helping grow the economy. However, the effectiveness of these measures will depend heavily on their implementation and the accompanying fiscal restraint.
Flattening the income tax would transform Kansas from a flyover state into a destination. This move would simplify the tax code, making it fairer and less of a headache—because the only thing Kansans should worry about rising are the sunflowers.
Kansas has also flirted with property tax relief with KPI promoting a constitutional amendment to limit appraisal valuation increases, which has broad support. The same or separate constitutional amendments should limit property tax levies, which cover the product of appraisals and tax rates, and cap state and local government spending to the rate of population growth plus inflation. The latter would best limit the true burden of government in the form of spending, providing predictability and stability for homeowners and businesses alike.
Kansas is sitting on a $4 billion reserve—it’s like having a savings account when you’re deep in credit card debt. Responsible budgeting ensures fiscal sustainability and prevents the state from falling into the cycles of budget shortfalls and hasty tax hikes that have plagued it in the past. By following this approach, over-collected taxpayer money called a “surplus,” can be returned by cutting a flat income tax rate.
This can be achieved by spending on essential services outlined in the state’s constitution, providing opportunities for strategic budget cuts and growth of no more than the rate of population growth plus inflation. This balanced approach helps ensure fiscal sustainability without compromising essential services.
By implementing bold tax reforms and adopting a disciplined approach to spending, Kansas can pave the way for a prosperous future. These measures will create an environment conducive to job creation and economic competitiveness, ensuring that Kansas becomes a place where businesses thrive, and residents enjoy a higher quality of life.
