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Kansas' legislative session ends with doubt about jobs

TOPEKA — After a campaign year billed to be about jobs, jobs and jobs, Democrats say the 2011 legislative session wound up being more about abortion, voter ID and strip clubs.

Republicans, who dominate the Legislature, defend their performance on the economy, saying the just-ended session laid a solid groundwork of government cutbacks and tax breaks for business that will ultimately allow the private sector to thrive and create employment opportunities.

But one thing is certain — the state will have a way to go to replace the jobs that have been and will be lost in government.

The budget that passed the two houses will cut employment in state government and state-supported schools by at least 6,600 full-time-equivalent jobs in the 2011 and 2012 fiscal years.

And Rep. Jim Ward, D-Wichita, chairman of the South-Central Kansas Legislative Delegation, said that's going to be hard to make up.

He said he thinks the regional economy is slowly righting itself, pointing to resurgence in the all-important aircraft industry, particularly the contract for Boeing and its suppliers to build the next-generation tanker for the Air Force.

But, he added, "Unfortunately, I think the cuts are going to slow it (economic recovery) down a little bit because you are putting people out of work, because those are people who go to the store, and buy cars and refrigerators and food and do all the things that help keep the economy going."

Sen. Dick Kelsey, R-Goddard, acknowledged that job cuts by the state will sting, but he is hoping they'll be replaced by an expanding private sector.

"Just by the reduction in the budget, there will be people who were working who will not be," he said. "Most of the school districts are laying off people, and that's very unfortunate — I'm not glad about that because I believe those people were performing an important function."

He said he is "very hopeful" that the actions of the Legislature and governor will create jobs.

"In answering the question will it create more jobs than are reduced in government, I think the thing that we need to focus on is the fact that we're trying to create private-sector jobs, not government jobs," he said.

"The last couple years we had an increase in government jobs but a decrease in private-sector jobs. And so if we reverse that trend, we've done some good things."

Job losses

It is difficult to know now — only a week after the Legislature finished its budget process in a 21-hour marathon session — just how many jobs will be lost because of state budget cuts.

In addition to direct cuts in the state government, the budget reductions will ripple through school districts and local agencies as they try to make ends meet going forward with the state funding they get.

But some job losses are known quantities, particularly direct state employment.

The original 2011 budget authorized 41,521 full-time-equivalent positions — 65 jobs fewer than the previous year.

But with cuts made along the way, the final jobs number for the state this year will end up at 41,147 — a loss of 374 positions.

The 2012 spending plan, which begins July 1, authorizes 39,184 positions, a loss of 1,963 from the current year — about a 5 percent reduction.

That's not counting school districts across the state.

This year, they lost 1,661 jobs, about half of which were licensed teachers, said Dale Dennis, assistant state superintendent of schools.

"I would say this year would be similar," Dennis said, projecting a further loss of jobs in the 1,600 to 1,700 range.

Many of the jobs lost have been and will be through attrition, abandoning positions that are unfilled due to retirement or job changing.

That reduces the impact on individuals. But each job that goes unfilled means one less person paying taxes and shopping at local merchants.

Added together, the state and school jobs represent a total loss of 6,600 to 6,700 positions in this fiscal year and the next — roughly the equivalent of if Cessna Aircraft were to leave the state.

Social issues

Democrats at all levels say it was a frustrating session and that Republican conservatives who control the Legislature were distracted from the economy as they worked to push through social-issues bills that had been bottled up by Democratic governors for the past eight years.

For example, the Legislature passed four different bills to make it harder to provide or obtain an abortion, while the leaders in the majority party could cite only about three initiatives that have some potential — direct or indirect — to produce jobs.

Democrats, who lost the governorship and saw their seats in the 125-member House drop from 49 to 33 in the 2010 election, were largely powerless to influence the process.

"I think the right wing of the Republican Party, which is really in charge right now, is more interested in a lot of social issues than they are putting forward concrete proposals that deal with jobs," said House Minority Leader Paul Davis, D-Lawrence. "I don't think the governor came up with anything that was all that specific."

Ward concurs.

"During the campaign, everyone I talked to, and having watched campaigns across the state, the No. 1 goal, the No. 1 issue, was jobs and the economy," Ward said. "Yet it seems like we waited till 2:30 in the morning on the last day to talk about a budget that does little or nothing to promote jobs.

"There's a couple of tweaks on the outside, but we spent a lot of time talking about social issues, a lot of time talking about strip clubs and a lot of time talking about annexation — issues that are important, but when the core issue of voters was jobs and the economy, I think that the majority party is lacking."

Kelsey said the focus on social issues and away from jobs wasn't as much of a partywide phenomenon as the Democrats are trying to make it.

"I don't think that argument can be made in the Senate like it could in the House," Kelsey said. "I think the Senate's been more balanced in our workload."

The governor's view

Republican Gov. Sam Brownback is highly upbeat about the year's economic accomplishments.

The biggest, he said, was the passage of a bill that he proposed to allow "expensing."

Essentially, it expands income tax deductions for new business equipment and software.

"We will be the first state in the nation to have expensing, so whenever you invest a dollar in the state of Kansas, you can expense it in year one if that's what your desire is," Brownback said.

"That has created, on the federal level when they've done that, an intense investment avenue at that point in time because this really works to your advantage."

No. 2 was another Brownback idea for "Rural Opportunity Zones."

The plan is to lure out-of-state residents and young college graduates to declining rural areas that make up more than half the state.

"If you move into there from out of state, (you pay) no state income tax for the first five years," the governor said.

For graduates in debt, the program would help by "buying down half of that student loan if the county commission agrees to be a part of that as well."

Brownback also noted that the Legislature reworked the tools available for the Commerce Department to use as it seeks to attract business to the state. The one receiving the most attention is the repeal of some tax credits to create a "deal-closing fund" to provide millions of dollars in cash grants to large projects that are deemed strategically important to the state.

"That deal-closing fund often can be the margin that a lot of states will use, like a Texas, to close the deal," he said.

It sends a message to prospects saying "all right, here are funds (to show) that we want you to be in the state of Kansas," the governor said.

Brownback has taken to the road, holding "summit meetings" with business leaders to get their views on how to boost key industries in the state.

The first summit was in Wichita to talk about aviation and the second at YMCA Camp Wood, in the Flint Hills, to discuss tourism.

The third, focusing on life sciences, will be Tuesday at the University of Kansas Medical Center in Kansas City.

"We're getting a series of these economic development forums, and listening and hearing from them what we can do to be a bigger incentive," Brownback said.

The Republicans' approach has been tried for years and hasn't worked yet, according to Ward.

"You have to buy into the philosophy that if some people don't pay their fair share, that they'll turn around and create jobs," he said. "And we've been doing that now for 10 years.

"We have over $1 billion in tax cuts over a 10-year period of time. Yet, the No. 1 issue in the last election was jobs; we still have 20,000 people in Sedgwick County without jobs."

Senate Minority Leader Anthony Hensley, D-Topeka, said he voted for the opportunity zones and against the expensing bill.

For the good of the state, he said he hopes Brownback's plans work.

"It's all in the future and we'll just have to see whether these measures really do create jobs," he said. "If anything, his (Brownback's) record has shown right now that we're going to have layoffs of teachers, we'll have a lot of state employee layoffs as a result of these cuts, and so we're actually reducing jobs rather than creating jobs."

Kelsey is more optimistic.

"I do think we're going to see a very revitalized and active Commerce Department using some of the tools that we've given them in the use of taxes and that kind of thing," he said. "Whether the tax advantages in the towns in western Kansas will bring more people into those areas, I don't know. Only time can tell.

"But I think there's going to be a natural growth in the economy just because we are slowly coming out of it (the recession)."

A 'lag effect'

What has the Democrats grumbling and the Republicans celebrating illustrates the main difference between the two parties' approach to economic recovery, said Bob Beatty, a professor of political science at Washburn University in Topeka, who closely monitors the Legislature.

Democrats prefer more immediate action while Republicans take a more indirect, long-term approach to job creation, he said.

"The (Republican) idea is less regulation, fewer taxes and a real business-friendly atmosphere," Beatty said. "That's in opposition to the federal government under (President) Obama, which was, push through a stimulus package, which Kansas was a beneficiary of last year."

The Democrats' approach was more like, "Here's some money, go build a bridge," Beatty said.

The corresponding Republican approach is to say, "We want to cut your taxes or give you a tax break on buying some machinery. We hope you go hire some people, but you don't have to. If you don't, well, that's too bad, but we can't necessarily really force you."

He said it's too early to tell whether programs such as expensing and Rural Opportunity Zones will make a difference in job recovery. If it does happen, it could be years before the effect is known, he said.

"There is a lag effect to that," Beatty said. "That's where somebody can say, 'Hey, we did a lot that will pay off down the road in terms of jobs.' But we may not see it necessarily right in front of us, where a stimulus package, that can be pretty quick in terms of jobs."

He said he expects the next couple of years to bring more cutting of government employment, in keeping with Republicans' philosophy that it's "part of making an environment that's conducive to increasing private-sector jobs."

"It looks to me like phase one of probably a several-year plan," he said.

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