The road not taken is the path to economic recovery. Will the Kansas Legislature learn?

If you aren’t satisfied with the outcome after decades of effort, what makes you think that doing the same things over and over again will produce a different result?

That’s certainly the case with the alphabet soup of governmental economic development schemes. Kansas is in its fifth consecutive decade of trailing the nation on job growth. In fact, had Kansas grown at the national average between 1979 and 2019, there would be an additional 313,000 jobs in the state today.

The data show that the subsidy game isn’t working, and so do independent studies by academics at the University of Kansas and other universities. Subsidies, incentives, bribes — whatever you want to call them — create publicity at ribbon cuttings, but they do nothing for Kansas taxpayers. Kansas has the nation’s eighth-highest combined state and local sales tax rates, the 15th-highest effective property tax rate on residential property, the worst effective property tax rate on rural commercial property and the 11th-highest on urban commercial property. Many other states have lower income tax rates.

Heading into a new legislative session, it’s time for lawmakers to take the road not previously traveled on the path to economic recovery. Broadly speaking, it’s a multifaceted approach that would allow employers to flourish, take action to reduce high taxes, address perpetually low student achievement and focus effort on one of the most critical elements of the state economy: entrepreneurship.

Kansas is heavily dependent on jobs created by new establishments. Without those jobs, Kansas wouldn’t have had a single year of private job growth since 1984.

Economists point to the importance of “gazelle” companies — young, fast-growing enterprises with base revenues of at least $1 million and four years of sustained revenue growth. Some famous gazelles include Garmin, Hewlett Packard, Microsoft, Nordstrom, Google, Disney, Molson Coors, Dell and Facebook. Each was started in a basement, garage or bedroom (with no taxpayer subsidies).

Startups and small, growing companies get bogged down fighting through multiple layers of bureaucratic red tape and getting access to private capital, and that creates entrepreneurial opportunities for the Kansas Department of Commerce:

▪ Close the candy store that hands out treats to a few companies and open a concierge service. Businesses looking to open, expand or move to Kansas could be assigned a concierge whose job is to coordinate with state, local and federal agencies to expedite permitting and other regulatory matters, and connect companies with funders. Legislators should also make the concierges’ jobs easier.

▪ Create a sunset review board for all state regulations, agencies, boards and commissions.

Legislators also need bold action to get some big negatives off the state résumé:

▪ Eliminate wasteful spending to reduce sales and income tax burdens. In 2018, Kansas spent 40% more per resident than the states without an income tax.

▪ Pass legislation such as a state Senate bill introduced this year that promoted “truth in taxation” property tax transparency. A similar measure has reduced effective property tax rates in Utah.

▪ Pass “money follows the child” laws — allowing families to spend their students’ share of public school money for the school of their choice — for kids below grade level, those with disabilities and for all kids in schools that don’t offer full-time in-person learning. Even in Johnson County, 30% of 10th-graders are below grade level in math, and only 37% are on track for college and career. Achievement won’t improve without legislative intervention.

Legislators can put Kansas on the path to success with the courage to break from the past. Otherwise, it will be déjà vu all over again.

Dave Trabert is chief executive officer of Kansas Policy Institute, a 501(c)(3) nonprofit focused on the protection of constitutional liberties.

This story was originally published December 31, 2020 at 5:00 AM with the headline "The road not taken is the path to economic recovery. Will the Kansas Legislature learn?."