Kansas’ unemployment rate dipped to a new low in October, according to preliminary estimates from the Kansas Department of Labor and the U.S. Bureau of Labor Statistics.
The seasonally-adjusted unemployment rate is down 3.8 percent from September and down from 4.3 percent year-over-year.
“In October, 3,383 additional Kansans became employed,” said Kansas Secretary of Labor, Lana Gordon. “This grew the labor force and factored into the unemployment rate dropping to 3.6 percent, the lowest it has been since August 2000.”
Sen. Richard Hilderbrand, a Galena Republican, said the numbers likely reflect positive trends in the state’s economy.
“I think the state economy has improved, but I say that tongue-in-cheek because of the $1.2 billion tax increase,” he said.
Lawmakers adopted a retroactive tax increase at the end of the 2017 legislative session. Hilderbrand voted against the tax increase.
“Unfortunately, when you take more money out of the economy, it’s going to have a negative effect on the economy,” Hilderbrand said. “…In time, you could see the unemployment rate start going in the opposite direction.”
The state’s detrimental tax increase could be offset by a proposed federal tax cut. Both houses of Congress approved tax cut plans. Members are hashing out differences between the two plans in committee with a goal of putting a tax cut proposal on President Trump’s desk before Christmas.
Hilderbrand said elected officials need to understand that Kansas is in competition with Missouri, Colorado, Oklahoma and Nebraska. His district in southeast Kansas is a few miles from the Oklahoma and Missouri borders. Arkansas is only an hour away. So shoppers, residents, and business owners can easily go across state lines for lower tax rates.
The biggest challenge for state lawmakers, when they return to Topeka in January, will be figuring out a way to control spending, Hilderbrand says. Despite passing the largest tax increase in state history last session, it won’t be enough to cover current spending projections in a few years.
Lawmakers must also respond to the Kansas Supreme Court, which ruled current school spending is inadequate during the 2018 session. A special interim committee met today to discuss possible solutions.
“If we continue to outspend our growth, it’s going to have a devastating effect,” Hilderbrand said. “We’re getting to a point, I feel, we keep taking funds from one place to spend in another. We’ve got to stop that and really control our spending.”