State of Missouri economy is in a state of misery in too many ways

Gov. Sam Brownback of Kansas (left) and Gov. Jay Nixon of Missouri don’t have a lot to smile about when it comes to their states’ economies.
Gov. Sam Brownback of Kansas (left) and Gov. Jay Nixon of Missouri don’t have a lot to smile about when it comes to their states’ economies.

Job growth is lousy. Personal income isn’t booming. The overall economy is among the nation’s weakest.

Yes, Missouri is in a world of fiscal hurt in many ways right now.

While the woes of Kansas have received far more deserved attention, the Show-Me State shares too many of its neighbor’s economic problems.

The Kansas City area is a casualty of this state of affairs — and also a contributing factor. In recent months neither side of the state line has shown much oomph compared with other regions competing for jobs and people.

Missouri does have more going for it than Kansas on a few fronts, including a healthier state budget. Missouri Gov. Jay Nixon and the General Assembly haven’t yet followed the mistakes of Kansas Gov. Sam Brownback and his Legislature, which have blown through budget reserves, diverted funds from highways, maxed out on borrowing and cut public services.

However, the problems of the Missouri economy demand better-focused leadership by business and political leaders across the state and in Jefferson City. Elected officials need to pump more money into infrastructure, especially the state’s underfunded roads system, which may require a tax increase. The state also must revamp its tax credit program to create more 21st century jobs. And Missouri can’t continue threatening financing for its higher education institutions.

As for Kansas City, its business, civic and political leaders had better jumpstart their long-promised effort to boost job-attraction programs.

Slow job growth

The lack of strong employment gains in Kansas has been well-chronicled. In the most recent 12-month period, the state tied for the ninth worst rate of total nonfarm job growth in the nation.

But Missouri was not much better, coming in tied for 14th worst.

Unemployment rates in both states are lower than the national average. But the stagnant job markets indicate neither state has an abundance of expanding or new businesses. Making matters worse, most states with lower unemployment rates than both Kansas and Missouri are adding jobs more quickly.

Sluggish personal income

Recent figures from The Pew Charitable Trusts show Kansas and Missouri tied for the 12th worst rate of growth for personal income in the country.

Personal income increased by 2.6 percent in both states over a 12-month period through Sept. 30, 2015.

Pew officials point out that the trends in personal income — which includes wages as well as benefits provided by employers and governments — “matter not only for individuals and families but also for state governments, because tax revenue and spending demands may rise or fall along with residents’ incomes.”

Overall state economies

The Business Insider website earlier this year ranked the economies of all 50 states and the District of Columbia based on seven measures. They included gross domestic product per capita, weekly wages, job growth and house prices.

After crunching the numbers, Missouri placed 10th worst in the ranking — right ahead of Kansas at 11th worst.

Missouri’s very low weekly wages held it down, and Kansas’ low wage growth contributed to its low standing.

Lagging Kansas City area

The numbers from state officials show a grim reality for Kansas-side counties, including Johnson and Wyandotte: They gained a total of zero jobs from December 2014 to December 2015.

But the Missouri side of the metro area hardly had much to cheer. In that same span, Jackson and other counties added only 2,400 jobs. That’s a puny growth rate of 0.2 percent, continuing a multi-year problem.

With those kind of baby steps on employment, there’s no way this region is going to catch up to Denver, Minneapolis and so many other competitors.

Last year, the Civic Council of Greater Kansas City and other groups business promised that a regional initiative called KC Rising would be rolled out in 2016 to make the community a more attractive place to do business. But there’s no buzz, yet, around the effort.

Finally, good news

Through January, Missouri’s total budget revenues were up almost 5 percent over the previous fiscal year.

Kansas receipts also rose through January, but by only 2.2 percent — and that was driven exclusively by the fact that Brownback and the Legislature boosted the state sales tax rate in 2015.

Missouri also is in much better shape in setting aside money for public workers’ pensions. The Show-Me State ranked 17th best in the nation with a 77 percent pension funding ratio at the end of 2013, the most recent figures available. But Kansas was 12th worst, at 60 percent.

And yet …

Some Missouri Republican lawmakers are pushing a bad bill to speed up Kansas-style tax cuts in their state. Get past the empty rhetoric that this will “create more jobs” and see the reality in Kansas: It hasn’t happened. Instead the cuts have created huge fiscal headaches that are damaging public services.

Missouri and Kansas need enough funds to invest in building stronger states. That especially requires funding first-class K-12 schools and higher education, plus providing safe roads and bridges.

The alternative is a race to the bottom, a race both states are “winning” in too many ways.