The Kansas Economic Progress Council hired Bernie Koch to analyze tax and budget legislation and serve as a watchdog over other goings-on in Topeka. Mr. Koch took an interest in the tax cut bill that sits on Gov. Sam Brownback’s desk and began to wonder about the consequences of it.
He asked himself how many jobs it would take to pay for the income tax cut measure in the bill. It was a good question since the measure is being sold as a sure-fire way to stimulate the economy and create jobs.
Here are his calculations:
“Assuming each job will pay $50,000 a year (a very generous assumption).
“Assuming each new job produces 9 percent in income and sales tax to state government (also very generous).
“That means $4,500 a year will go to state government for each new job.
“This means that 53,222 new jobs will have to be created in the next two years or so to fill the $242.2 million shortfall to the state budget caused by the legislation (just to bring the ending balance to zero).
“In March 2012, the private sector employment in Kansas was 1,097,100. That means employment growth would have to be 4.85 percent in the next two years. That’s aggressive, but not impossible.
“To fill the Fiscal Year 2018 budget gap of $2,475,100,000 predicted by the latest Legislative Research fiscal note, it would take 550,022 new jobs.
“That means Kansas jobs would have to grow 50 percent over the next six years (an average of 8.3 percent a year).
“How does that compare to Texas job growth over the past 10 years? According to the U.S. Department of Labor, Texas private sector job growth over the past 10 years was 14.79 percent, or an average of 1.479 percent per year.
“Kansas would have to grow over 5 and a half times as fast as Texas has been growing to get to a zero ending balance.”
A COUPLE OF questions: (1) Why hasn’t the debate in the Legislature on this truly radical change in the state’s tax structure included this kind of statistical analysis? The Kansas Legislative Research Department that calculated the effect the tax cuts would have on state income could make a new-jobs-required analysis if it were asked to do so. (2) If Mr. Koch’s math is more or less accurate, how on earth could any conscientious representative or senator vote for it?
Answers to these two questions are that Gov. Brownback and his followers in the Legislature don’t accept the estimates made by Legislative Research. They believe that tax cuts create jobs, period. They don’t use math. They use faith. And that takes the matter beyond the realm of rational analysis or debate. Case closed.
