“Falsehood flies, and truth comes limping after it.” – Jonathan Swift, 1710
As the general election campaign hits high gear, it’s time to provide some “limping” truth as a counter to the expected all-out exercise in hyperventilation and distortion. All involved will work hard to persuade us that their candidate is the only one to improve our well-being while the opposition is sure to bring us economic calamity and woe.
Beginning in January 2011, as Sam Brownback started his term as governor, the Bureau of Labor Statistics found nonfarm employment in Kansas was 1,335,500 workers, an increase of 14,200 (1.1 percent) from the lowest post-2008 employment number 10 months earlier. In the first 42 months of the Brownback administration, between January 2011 and June 2014, net nonfarm employment grew by 49,200 to 1,384,700. This is 3.7 percent in 3 1/2 years. Increased employment in the current administration has averaged 1.06 percent per year – no better than it was before the Brownback “experiment” began.
Other measures can improve understanding of the economic realities of Kansas. Just as the national economy has an overall measure – gross domestic product – there is a gross state product. According to a July 2014 Survey of Current Business published by the U.S. Department of Commerce’s Bureau of Economic Analysis, Kansas in the 15 years between 1997 and 2012 averaged annual GDP growth of 2.2 percent.
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Kansas officials use Colorado, Nebraska, Iowa, Missouri and Oklahoma frequently for economic comparison. Over those 15 years, only Colorado had a higher average rate than Kansas. In 2013 Kansas’ rate of economic growth was only 1.9 percent, and only Missouri, out of the comparative group, performed more poorly.
What about personal income – the primary thing that is taxed?
According to the Bureau of Labor Statistics, between January 2010 and January 2011, Kansans’ per capita personal income jumped more than 8 percent, but from 2011 until 2013 the rate of growth dropped dramatically. Per capita personal income for 2011 was $42,079; 2012’s value was $43,015; and 2013’s was $43,916. Across this period during which the governor’s tax-cutting and pro-business policies were supposed to be raising Kansas’ economic metabolism, the pulse rate of personal income expansion slowed to just 2.15 percent per year.
In other words, taking at face value the administration’s assertions regarding impending economic growth measured by new enterprises and new jobs, per capita personal income barely kept up with inflation. Growth in income was supposed to provide more revenue at lower tax rates; it hasn’t.
The decline in Kansas tax revenues (down more than $700 million for the fiscal year just ended) has been well-documented in other sources. Some critics allege it’s problematic only to the extent that our governor and Legislature lacked equal enthusiasm for slashing state spending.
The dirty little secret is that what government does in the way of tax policy and improved “business climate” only slightly affects the direction of overall economic growth. The limping truth, however, will arrive in January, with a general fund budget for the next fiscal year that must be made hundreds of millions smaller.
Mark Peterson teaches political science at the college level in Topeka.