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Economist Says Kansas Tax Structure Linked To Low Revenues

Abigail Wilson

The Midwest Regional Public Finance Conference was held in Wichita today. Experts on the role of the government in the economy discussed the latest research, regulations and trends.

Kelly Edmiston, a senior economist at the Federal Reserve Bank of Kansas City, says the economy in the Kansas region is growing more slowly than the rest of U.S. He says the setbacks are the result of a decline in the energy and agricultural sectors.

Dr. Ken Kriz, director of the Kansas Public Finance Center and an organizer of the conference, raised the issue of how "certain parties have blamed the relatively slow economy, low job growth and revenue shortfalls in Kansas on oil and agriculture.

"Given what your data is, how well does that story play out? How much of Kansas’ story can be explained by weakness in the sector?” Kriz asked. 

Edmiston said that in his own view, "it’s clear that changes in the tax structure are largely responsible."

He referenced Nebraska as an example of a similar type of state in terms of agricultural dependency.

"And the revenue situation there is very good," he says.

Kansas lawmakers are working to erase a $290 million deficit in order to balance the state's budget. One proposal currently in the Legislature would close a tax exemption for businesses, which Governor Sam Brownback enacted to help boost the economy in 2012.

If those businesses--most of the small businesses--are taxed again, it could bring in $170.6 million in fiscal year 2017. But the bill faces strong opposition from business groups, who warn that it will complicate the state’s tax code and hurt small businesses.


Follow Abigail Wilson on Twitter @AbigailKMUW.

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