Tax Study Released Today

A new study on the ramifications of lowering the state income tax was released today at a statehouse news conference. Bernie Koch, executive director of KEPC, and study author Dr. John Wong presented findings at the statehouse today. The study finds that, for every 1 job created, 1.63 are lost due to study released today finds that a lowering of the income tax would result in a loss of 1.63 jobs due to a reduction in overall state spending. The study was commissioned by the Kansas Economic Progress Council.

The press release is available here, and the ful text of the study is available here.

Dr. Wong’s slide deck is available here.

KEPC UPDATES: Ranking Drops; Allotments = Cuts; County Profiles Updated

In this issue …

  • Forbes: Kansas ranking drops from 13th to 25th in two years
  • How allotments (cuts by the Governor) would work
  • Kansas County profiles updated

 

Forbes:  Kansas ranking drops from 13th to 25th in two years

Forbes magazine now ranks Kansas 25th in the nation in its annual “Best States for Business” report.  That’s a major drop from last year, when Kansas ranked 17th best.

In 2012, Kansas was ranked 13th best out of the 50 United States.

This is despite the 2012 and 2013 income tax legislation that was said to make Kansas more competitive.

Forbes has several positive things to say about the state:  “Statewide living costs are among the lowest in the U.S. at roughly 10% below the national average.  The median home price is just $135,500.  Kansas offers one of the best business incentive packages of programs in the country.”

Note:  some legislators are calling for elimination of economic development business incentives as part of cuts to deal with the hundreds of millions of dollars in revenue shortfalls facing the state over the next two years.

Here are the Forbes Kansas ratings that went into the report:

  • #31 in business costs
  • #26 in labor supply
  • #12 in regulatory environment
  • #21 in economic climate
  • #39 in growth prospects
  • #28 in quality of life

The top states in the rankings are

  1. Utah
  2. North Dakota
  3. North Carolina
  4. Virginia
  5. Colorado

Meanwhile, the Bloomberg Economic Evaluation of States has dropped Kansas even further, according to an overlooked November 2 Bloomberg story about the election for governor in Kansas.

Tim Jones and Jennifer Oldham wrote that Kansas was seventh best for all of 2013, but is now ranked fourth-worst in economic health for the first half of this year.

The index measures tax collections, home prices, mortgage delinquency, job growth, personal income and performance of local company shares.

 

How allotments (cuts by the Governor) would work

Under certain circumstances, Governor Brownback has the ability to cut the budget when he gets official notification that the ending balance for the current year is insufficient.

That may be about to happen.

The official Kansas revenue estimates released November 10 cite a reduction of revenues for the current budget year of $205.9 million. That means the Governor and legislature must cut $280.1 million from the current budget (or find the equivalent in revenue).

Next year’s budget estimate (FY 2016) indicates a $434.4 million shortfall.

Here’s the statutory language about how the “allotment” system goes into effect.  It has some legalese but is understandable:

75-3722. Application of allotment system; notice; appeal to finance council. An allotment system will be applicable to the expenditure of the resources of any state agency, under rules and regulations established as provided in K.S.A. 75-3706, only if in the opinion of the secretary of administration on the advice of the director of the budget, the use of an allotment plan is necessary or beneficial to the state. In making this determination the secretary of administration shall take into consideration all pertinent factors including (1) available resources, (2) current spending rates, (3) workloads, (4) new activities, especially any proposed activities not covered in the agency’s request to the governor and the legislature for appropriations, (5) the minimum current needs of each agency, (6) requests for deficiency appropriations in prior fiscal years, (7) unexpended and unencumbered balances, and (8) revenue collection rates and prospects.

Whenever for any fiscal year it appears that the resources of the general fund or any special revenue fund are likely to be insufficient to cover the appropriations made against such general fund or special revenue fund, the secretary of administration, on the advice of the director of the budget, shall, in such manner as he or she may determine, inaugurate the allotment system so as to assure that expenditures for any particular fiscal year will not exceed the available resources of the general fund or any special revenue fund for that fiscal year. The allotment system shall not apply to the legislature or to the courts or their officers and employees. Agencies affected by decisions of the secretary of administration under this section shall be notified in writing at least thirty (30) days before such decisions may become effective and any affected agency may, by written request addressed to the governor within ten (10) days after such notice, ask for a review of the decision by the finance council. The finance council shall hear appeals and render a decision within twenty (20) days after the governor receives requests for such hearings.

In a nutshell, the Administration can make cuts in the budget without the legislature’s action, but there’s a 30 day period between when the trigger is pulled and the cuts take effect.

STAY UP TO DATE AS WE APPROACH THE 2015 LEGISLATIVE SESSION – JOIN KEPC TODAY!

 

Kansas County profiles updated

There’s a wealth of information about the counties in Kansas in the updated Kansas County Profile Report, which came out last week.

The report is published by the Institute for Policy & Social Research (IPSR) at the University of Kansas with support from the KU University Center project.

The report contains 12 categories of information about each Kansas county:

  • Population
  • Vital Statistics and Health
  • Housing
  • Education, Social Environment
  • Business
  • Employment
  • Income
  • Banking
  • Government
  • Crime
  • Agriculture

You can generate a report on any county in Kansas simply by clicking on it from the web site.

KEPC UPDATE: Revenue estimating group meets Monday

Revenue estimating group meets Monday Just when you thought the election campaign debate over fiscal policy was over, it will likely surface again this week as the Kansas consensus revenue estimating committee meets to predict state revenues. The committee is sure to lower last April’s estimates, starting the process that could trigger reductions to the […]

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KEPC UPDATE: Kansas Speaks, lagging employment growth, legislature supports transpo

Docking Institute releases 2014 Kansas Speaks Survey Kansas still lags region in employment growth Survey shows legislative support for transportation   Docking Institute releases 2014 Kansas Speaks Survey What is probably the most comprehensive survey of what Kansans are thinking came out over the weekend. The sixth annual Kansas Speaks Survey was prepared by the […]

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KEPC UPDATE: Employment figures for KS and region

A look at the latest employment figures in Kansas and the region Here’s a quick update on last week’s employment growth figures for Kansas. You may already know that Kansas jobs grew about 0.8% from August of 2013 to August of 2014 (seasonally adjusted). How does Kansas compare to the states in the region? The […]

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KEPC UPDATE: Ks leads nation in income tax & revenue decline; Median household income growth low

In this issue … Kansas leads nation in income tax decline AND total revenue decline Median household income growth low in Kansas   Kansas leads nation in income tax decline AND total revenue decline A report released last week by the Rockefeller Institute of Government says Kansas individual income tax collections declined 42.9% comparing the […]

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KEPC UPDATE: Revenues on target? September surprise? Impact of cuts on schools?

In this issue … Will Kansas September revenues hit the target? September surprise for the budget from education? Survey of school districts looks at impact of cuts   Will Kansas September revenues hit the target? September will be a key month in predicting whether Kansas tax revenues will meet, surpass, or fail to live up […]

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KEPC UPDATE: KDOT projects; Kansas Fairy Tale

In this issue … KDOT announces projects for next two years but will they hold? A Kansas Fairy Tale   KDOT announces projects for next two years but will they hold? This week, the Kansas Department of Transportation announced road and bridge projects for the next two years, including 464 highway projects, 194 bridge/interchange projects, […]

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KEPC UPDATE: Koch op-ed, $238M shortfall in 2016, contractors aim to protect transpo funds

In this issue … Charles Koch op-ed in USA Today links to study critical of state tax cuts Kansas faces $238 million shortfall by July of 2016 Contractors launch program to protect transportation funds  JOIN KEPC TODAY – STAY AHEAD OF THE LATEST NEWS   Charles Koch op-ed in USA Today links to study critical […]

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KEPC UPDATE: Standard & Poor’s lowers KS bond rating

Citing Kansas income tax cuts and a “structurally unbalanced budget,” Standard & Poor’s rating services has announced a one-level downgrade of its issuer credit rating (ICR) for the State of Kansas. S&P also announced a double-notch downgrade of Kansas’ appropriations-secured debt. In a news release, the service said, “The outlook on both ratings is negative.” […]

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KEPC UPDATE: WSU study questions cuts, rural roads more dangerous

In this issue … Wichita State study questions cutting taxes to grow the economy Kansas rural roads more dangerous   Wichita State study questions cutting taxes to grow the economy A detailed scientific study by two Wichita State economists questions cutting taxes as a way to boost state economies.  The research was published nationally in […]

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