Yael T. Abouhalkah

Even after Gov. Sam Brownback’s tax cuts, jobs aren’t fleeing Missouri to Kansas in the KC area

Kansas Gov. Sam Brownback (left) celebrated his primary victory on Aug. 5 in Johnson County. But will he be so happy come the end of the general election on Nov. 4?
Kansas Gov. Sam Brownback (left) celebrated his primary victory on Aug. 5 in Johnson County. But will he be so happy come the end of the general election on Nov. 4? The Associated Press

When he visited Johnson County in August 2012, Kansas Gov. Sam Brownback boldly claimed his aggressive tax-cut law would bring wonderful economic dividends to that part of the Kansas City area.

“That’s a shot of adrenaline to the heart of this economy,” Brownback said at a forum of small business leaders at Johnson County Community College, pointing out that their profits would be exempt from state income taxes starting Jan. 1, 2013.

Since that day, this area on both sides of the state line has become a battleground where the governor’s politically driven theories are being tested in the real world.

Perhaps the single biggest speculation by Brownback’s supporters was that small businesses in Kansas City would hop the state line into Johnson and Wyandotte counties. This would be the final nudge needed, it was said, to escape paying the city’s 1 percent earnings tax, too.

Meanwhile, Missouri General Assembly lawmakers rushed to pass tax breaks as well, reacting to the possibility that a flood of jobs would be leaving for Kansas.

So far, however, all these pumped-up promises by the Brownback camp and all the stoked-up fears of Republican Missouri lawmakers have not come true.

Here’s the documentation, drawn from seasonally adjusted U.S. Bureau of Labor Statistics numbers, including private sector and government jobs.

▪ From January 2013 through August 2014, the Kansas side of this area added 5,600 jobs for a growth rate of 1.2 percent.

The Missouri side of the region gained 6,900 jobs on a slightly larger employment base, a growth rate of 1.2 percent — the exact same rate as in Kansas.

▪ From January 2014 through August, the Kansas side’s growth rate was 0.7 percent while the Missouri side recorded growth of 0.8 percent.

So the most recent pace of job growth actually has been slightly faster in Missouri than in Kansas in this area.

This debate would be simply something fun to watch except for the many negative effects of Brownback’s self-professed “real live experiment” with the state economy.

The tax cuts have led to deeper losses in state revenue than predicted. They have not created a significant growth in jobs that could begin to replace money lost from the tax reductions. The state’s bond rating has been reduced.

Most notably for Brownback, he is in a dogfight with Democrat Paul Davis for the governor’s seat this November.

But Brownback soldiers on. In recent appearances, he has trotted out the claim that job growth has been three times as high on the Kansas side than it has been for the Missouri side of this area.

The Brownback campaign gave me this BLS data regarding that claim.

From June 2011 through June 2014, private sector jobs grew at a pace of 2.3 percent on a nonseasonally adjusted basis on the Missouri side of the state line in this area. The rate was 6.8 percent on the Kansas side — or almost three times the rate of growth in Missouri.

Wait: Why start counting in June 2011 even though Brownback took office five months earlier? A quick look shows why the data cherry-picking occurred.

Fresh off the Great Recession, jobs surged in early 2011 in both state. Re-figure growth rates, and the Kansas side leaps to 11 percent from January 2011 through August 2014. However, the Missouri-side numbers also explode, to 7 percent.

Kansas is still ahead, but not by that much.

The Brownback numbers also count only private-sector growth, ignoring thousands of local and state government jobs lost in Kansas since 2011. Total employment is going up more slowly than the incumbent likes to let on.

So far, the tax-cut experiment has sliced state revenues, not been a great boon to Johnson and Wyandotte counties, and not really hurt Missouri-side counties.

To reach Yael T. Abouhalkah, call 816-234-4887 or send email to abouhalkah@kcstar.com. Follow him on Twitter: @YaelTAbouhalkah.

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