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Wichita-area businesses aren't as concerned about state and local regulations as that they want to see equal application and transparent guidelines - new study from KPI and WSU's Hugo Wall School. http://kansaspolicyinstitute.podbean.com/e/business-perceptions-of-state-and-local-government-regulation-1427819048/


Business Perceptions of State and Local Government Regulation
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James Franko, Vice President and Policy Director of Kansas Policy Institute, talks about a newly-released study titled
Tue, 31 Mar 2015 21:43:10 +0000
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Medicaid expansion discussion should be based on reality not promises of "free money" from Washington.


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Kansas residents who are already paying more for health insurance will also pay much more to fund an expansion of Medicaid. Patrick Parks, a fiscal policy analyst at the Kansas Policy Institute, talks about research KPI and other organizations have done in...
Fri, 20 Mar 2015 19:05:57 +0000
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Kansas' school finance system does little to serve our children. Instead it focuses on institutions. We need a student-focused, transparent formula that requires the efficient use of taxpayer money.


Legislature Considers Changes to School Funding Formula
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Dave Trabert, president of Kansas Policy Institute, talks about the state's K-12 school funding formula. The Kansas Legislature is considering block-grant funding schools for the next two years while they take a deliberative look at rewriting the formula....
Thu, 12 Mar 2015 15:10:07 +0000
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Debunking CBPP on tax reform and school funding - Part 4
Posted by Dave Trabert on Saturday, May 17, 2014

We continue our debunking of the Center on Budget and Policy Priorities (CBPP) latest report entitled "Lessons for Other States from Kansas' Massive Tax Cuts."  Part 1 dealt with state revenues. Part 2 covered state spending in general and school funding in particular.  Part 3 addressed claims that that tax reform hasn't boosted the economy.  Today we tackle their assertion that tax cuts won’t lead to economic growth.

CBPP claim #4 - Little Evidence to Suggest That Tax Cuts Will Improve Kansas’ Economy in the Future

Actually, there is a lot of evidence; CBPP just conveniently avoids it.  Instead, they substitute their opinion and employ their standard tactic of making claims without disclosing supporting data; they also reference predictions that Kansas will trail the nation next year in some economic indicators.

We’ll start the debunking with a brief history lesson.  Private sector job growth in Kansas trailed the national average in ten of the last fifteen years (1998-2013).  Kansas’ private sector gross domestic product trailed eight times (1997-2012) and personal income trailed eleven of the last fifteen years (1998-2013).  Indeed, Kanas’ history of economic stagnation was the impetus for tax reform.   As we explained in Part 3, the full economic impact of tax reform will take years to unfold.  It’s intellectually dishonest of CBPP to imply that tax reform isn’t working because a long term negative trend hasn’t suddenly created tremendous gains.

Now let’s look at the evidence.  The adjacent table compares the performance of the ten states with the lowest state and local tax burdens with the ten states with the highest burdens, based on the most recent rankings from the Tax Foundation.  The low-burden states are Wyoming, Alaska, South Dakota, Texas, Louisiana, Tennessee, New Hampshire, Nevada, South Carolina and Alabama.  The high-burden states are New York, New Jersey, Connecticut, California, Wisconsin, Minnesota, Maryland, Rhode Island, Vermont and Pennsylvania.

The low-burden states increased jobs at twice the rate of high-burden states.  Low-burden states have superior growth in Wages & Salaries and Private Sector Gross Domestic Product.  Low-burden states have positive domestic migration while high-burden states have negative domestic migration.  In other words, US residents are choosing to move to low-burden states and choosing to leave high-burden states. 

 

Tax reform critics like to attribute the superior economic performance of low-burden states to weather and access to ports and natural resources.  But you’ll notice that both groups have states with good weather, bad weather, coastal, land-locked and natural resources.  But there is one category which really separates the two groups of states – spending.  High-burden states spend 40 percent more per-resident to provide the same basket of essential services.  States with an income tax spend 49 percent more than those without an income tax. 

The key to having low taxes is to keep spending under control by providing services at a better price.  A state could be awash in oil revenue and still have a high tax burden if it spent more.  Texas, by the way, gets less than 3 percent of revenue from oil; they have a low tax burden because they only spent $2,293 per-resident to provide the same basic basket of services on which Kansas spent $3,409 (2012 actual per NASBO).

 

The moral of the story is pretty clear: states that spend less, tax less – and grow more.     

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