According to Jonathan Williams, chief economist with the American Legislative Exchange Council, “Kansas has fallen back to where it was before tax reform – in a competition with Nebraska for the worst economic outlook in the region.”
Such is Williams’s conclusion after analyzing the data for ALEC’s annual “Rich States Poor States” report. According to the ALEC report, Kansas ranks #26 among the states in economic outlook for 2018. This is the same rank it held for 2017. “Ironically,” notes Dave Trabert of the Kansas Policy Institute, “ranking declines from actions taken by the 2017 Legislature were offset by gains from actions taken by previous legislatures.”
Of the 15 ranked categories, Kansas took a particularly big hit in the “Top Marginal Personal Income Tax Rate” category as a result of what ALEC calls “the big 2017 income tax increase.” The state fell from #15 to #24.
Given the undoing of tax reform by the Kansas legislature this past year, not to mention the potential demands of the Kansas Supreme Court to pony up more money for education, Williams is not bullish on the state’s future. “As states across America use the benefits from federal reform to aggressively move in a more competitive direction,” Williams tells the Sentinel, “Kansas will fall further behind simply by standing still.”
The Kansas Policy Institute has done a helpful job of abstracting regional data from the ALEC report. Despite the political hijinks in Missouri, the state’s new Republican governor has helped improve Missouri’s ranking from the year prior. The state now ranks #23. Among regional states, Colorado at #15, Oklahoma at #16, and Arkansas at #22 outperform Kansas and Missouri. Nebraska at #28 and Iowa at #29 lag slightly behind.
Unfortunately for Kansans, things will likely get worse before they get better. Says Williams, “If the legislature raises taxes once again this year, Kansas could very well stand alone in the region as the state with the worst economic outlook in 2019.”