Gov. Sam Brownback defended the state’s income tax cuts during an appearance on MSNBC this week, contending that low taxes are attracting people to the state and creating new businesses.
The governor told Chuck Todd, host of “The Daily Rundown,” that he wants to “hit the accelerator on what we’re doing” in a second term and continue cutting tax cuts to create jobs and opportunity. He said that his policies are working but that their successes have been overlooked.
“We have a record number of new businesses,” the governor told Todd.
Reports from the U.S. Census Bureau and the Kauffman Foundation offer a different view.
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An April report from the Kauffman Foundation, a Kansas City, Mo., organization that promotes entrepreneurship, ranked Kansas 45th among states in business creation.
Nationwide, about 280 adults for every 100,000 people in the population created a new business each month in 2013, according to the Kauffman Foundation’s data. In Kansas that number was 180.
More than 15,000 new businesses registered with the Kansas Secretary of State’s Office in 2013. But that number does not reflect businesses that were dissolved, according to Nick Johnson, vice president for state fiscal policy for the Center on Budget and Policy Priorities, a liberal think tank based in Washington, D.C.
“First, while more than 15,000 new businesses were incorporated in Kansas in 2013, more than 16,000 other businesses were either dissolved by their owners or forfeited for failure to file an annual report and pay the annual fee,” Johnson wrote in a February post.
“Even adding in the 4,500 businesses that owners reinstated that year (by filing annual reports after letting their status lapse), the net growth in registered businesses was about 3,600 – smaller than in 2012, the year before the tax cuts took effect,” he added.
Johnson called Brownback’s statement “misleading, at best.”
Brownback also said tax cuts have “stimulated people coming into the state.”
A March report from the U.S. Census Bureau showed that more people are moving away from Kansas than moving to it. The state had a net loss of 12,557 people between July 2012 and 2013.
Between 2010 and July 1, 2013 the state gained 16,752 people from international migration, but lost 26,949 people to other states, resulting in a net loss of 10,197.
The state’s overall population did increase during that period by 40,777, but that was driven by births and not by people deciding to move to Kansas from other states.
Mark Dugan, Brownback’s campaign manager, noted that the Census data is a year old.
“People are moving to Kansas because of our innovative tax program that is resulting in new jobs,” he said. He added that the state has received more than 1,600 applications in four years for the rural opportunity zones program, which offers tax breaks for people who move to rural Kansas.
Brownback dismissed concerns that the state is projected to face a more than $200 million deficit by 2017. He promised that tax cuts would create enough economic growth to cover the state’s expenses in the long term.