In Kansas, Real and Wonky

From the office of Kansas Governor Sam Brownback.

Fellow Kansans,

It’s time to get real and wonky about taxes. There is plenty of myth, rumor, and misinformation about the tax plan floating through this election-charged atmosphere. Foremost amongst them? The Kansas tax plan is failing.

  • According to the U.S. Census Bureau, the number of Missourians moving to Kansas tripled after the tax cuts.
  • According to the Department of Revenue, during the first two years of the tax plan alone, 18,000 brand new small businesses sprouted up under the  pro-growth tax plan. (A recent report also dispels the myth that that these businesses merely restructured to take advantage of new tax laws)
  • According to the IRS, Kansas reversed nineteen years of financial losses to Missouri in the first year of the tax plan alone, with further gains in 2014.
  • According to the U.S. Labor Department, Kansas has a near record number of private sector jobs.

With a growing number of people moving to Kansas, new small business growth, increased money coming into the state, and near record employment levels, where does this tax myth originate? Most folks pin this myth on revenue numbers, so let’s start there.

While the state is bringing in more (of your) money this year than last year, that amount is still under the projected revenue amount. Holding the Kansas tax plan against actual revenues we see something interesting: Corporate taxes, which weren’t touched, are down in Kansas as they are nationally; Sales taxes, which the legislature raised, are down; but individual income taxes, which were cut, were up. You read that right. The increased revenues came from the taxes that Governor Brownback cut.

The discrepancy between projected revenue and actual revenue is largely due to the rural recession that most of Western Kansas is experiencing. Because of national headwinds, oil prices have dropped precipitously, with crop prices dropping 40-60%, and cattle prices dropping 23%. With farmers and ranchers receiving far less for their crops and cattle, they in turn aren’t purchasing new equipment, making upgrades, or hiring new farm hands.

So what is driving all the positive data bullet-pointed above? With agriculture and oil constituting a large share of the Kansas economy, how are we bringing more people and new money to the state? The answer is simple—the Kansas tax plan.

Melika Willoughby
Deputy Communications Director
Office of Governor Sam Brownback