Economic report foresees job growth in Kansas

10/02/2011 12:00 AM

10/02/2011 12:08 AM

TOPEKA — Kansas officials have a raft of new economic statistics to mull over this fall as Gov. Sam Brownback and his administration prepare to unveil what he promises will be a bold plan for lowering taxes and jump-starting the economy.

The Kansas Department of Labor released a 50-page document that consolidates economic reports compiled by state and federal agencies, ranging from the monthly fluctuations in the unemployment rate to building permits and 10-year occupation outlooks.

The 2011 Kansas Economic Report shows that Kansas has a strong work force participation rate compared to the national averages. Short-term and long-term projections show an increase in jobs in the vast majority of employment sectors, including health care. In addition, postings of online job openings have increased in recent months, indicating a demand for workers.

"It points to a good infrastructure in place, but the question is how to make that work," said Inayat Noormohmad, director of the state's Labor Market Information Services.

The unemployment rate was 6.7 percent in August, with more than 104,000 Kansans out of work. It was the first monthly increase in the unemployment rate since July 2009.

Noormohmad said the recession had taken a toll on construction and manufacturing jobs in Kansas, but those aren't the types of jobs that are coming open as firms look to hire. Those lost jobs are indicative of the slowing housing market nationwide and demand for durable goods.

"This is not something that you can rectify immediately," he said.

House Speaker Mike O'Neal said states should be bracing for what he and others call the "D.C. recession" — reduced federal spending that will force states to re-evaluate every program and funding level in the coming years.

O'Neal, R-Hutchinson, said that though taxes are likely to be cut in the 2012 session, it will take some time for businesses to digest the changes and begin hiring.

"The dynamic impact of what we put in place will be delayed," he said.

Democratic leaders in the House and Senate have their own ideas about what Brownback should do.

Senate Minority Leader Anthony Hensley said the best advice he would give Brownback would be to keep funding the 10-year transportation program legislators put in place in 2010.

"Over a 10-year period that will create over 175,000 jobs," said Hensley, D-Topeka, citing estimates for jobs created directly through construction or indirectly through improved road access.

Hensley is loath to support tax cuts for corporations, saying the additional revenue left in the economy would better "reverberate" if cuts were aimed at workers, through individual income tax cuts, or reductions in the sales tax. He said, if anything, Kansas should consider adding additional tax brackets for upper-income earners to make the income tax more progressive.

House Minority Leader Paul Davis sees the potential for economic growth in renewable energy and would like to see Brownback reverse a decision restricting development in the Flint Hills. Brownback this year expanded the area considered off limits to new wind turbines.

But Davis, D-Lawrence, agrees, with Brownback about the need for investing in technical education to prepare the work force for the next generation of jobs.

Hensley and Davis also would suggest rewriting the state's casino gambling law to lower the threshold for investing in a southeast Kansas casino. Developers have shown little interest in the region because of the $250 million minimum investment and proximity to numerous tribal casinos just over the Oklahoma line.

"This would give a huge boost to employment and the state's economy," Davis said.

Noormohmad said Kansas needs to show patience when waiting for economic recovery, noting that the state took more than 24 months to recover from the 2003 recession.

"There are shocks that we cannot control. Even larger states like Texas or California can't handle the shocks," he said. "We don't recover from recessions in a matter of months."

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