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Mark Peterson: Cutting taxes may help state stand out

  • Published Sunday, Dec. 22, 2013, at 12 a.m.

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Economic development allegedly promotes business growth in communities and states by marketing human capital, available land and proximity to markets, and by providing financial incentives. It results in a highly competitive but non-transparent marketplace where state and local governments woo enterprises and entrepreneurs that will bring a dowry of jobs and wealth to the closing.

Kansas is doing this with enthusiasm. Kansas Secretary of Commerce Pat George was in the Wichita area recently claiming some bull’s-eyes – AT&T and Creekstone Farms Premium Beef – that will bring a few hundred new jobs. Additionally, the Sunflower State has hopes of bringing aviation assembly jobs back to Wichita for the new Boeing 777X.

This kind of activity is very common among states and communities postrecession, and Gov. Sam Brownback has been frank about his expectations for stimulating homegrown and outside business growth in Kansas. He says they’ll come because of his income-tax reductions and business-investment incentives.

The research on economic development practices suggests that places like Kansas often have lots of competitors seeking to capture the same quarry. It appears that what the governor is displaying in the front window looks a lot like every other state’s storefront.

A scan of the Kansas Department of Commerce’s Business Incentives brochure is informative. We put our best foot forward on the front page, announcing, “Kansas offers a diverse economy perfect for your business.” But the Quick Facts page conveys a somewhat different message – one that seems to reinforce what some are saying about the real value of government on the cheap.

First, we claim “one of the most” talented labor forces in the nation. The evidence: “education spending which is 25th best in the nation.” We’re 17th in the nation for percent of adults with high school diplomas, and 16th for college graduates. We’ve also got a lot of roads (140,512 miles) and a lot of railroads (4,776 miles).

We’ve got some other data that might be unimpressive. According to the U.S. Census Bureau, about 390,000 Kansans live below the poverty level. The national average was 15.9 percent. Kansas’ number is 14 percent, so we’re a little better than average – about 22nd least poor.

The bottom 20 percent of Kansas families had incomes of $22,158 or less in 2012, and the average income in that bottom 20 percent was $12,565. The national average was $11,490.

The “upside” to such numbers is, as the Commerce Department points out, a low cost of living and that only 6.8 percent of the labor force is unionized.

It may be then that Brownback and his drumbeaters have it right. Cutting taxes in a state that’s “pretty good” or “not too bad” on its vital statistics might be just the ticket for firms looking for cheap labor, a below-average cost of living and minimal push-back from organized labor, and a place where a bit less than a quarter of family households must rely on some form of public support.

We might just feel better about our prospects if we were in the top 10 in something a little more important than college hoops.

Mark Peterson of Topeka teaches political science.

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