Originally published by Kansas Policy Institute.​

In a historic move toward greater accountability and transparency, the Kansas Legislature has taken the reins of the budget process by establishing the Special Committee on Legislative Budget. 

This change means lawmakers will no longer rely solely on the governor’s top-down budget proposal, which traditionally limited legislative review time and often led to rushed last-minute adjustments. 

Of course, there is no guarantee that these good intentions will lead to better decision-making. We need to look no further than Kansas’s years-old, toothless performance-based budgeting system to understand how noble intentions are often ignored in practice. Instead, this committee allows the Kansas Legislature to craft a budget that reflects the priorities of Kansas taxpayers by focusing on responsible spending and essential government functions.

House Speaker Dan Hawkins and Senate President Ty Masterson emphasized in a recent press release that the committee will enable legislators to “ensure that Kansas taxpayers are getting the most bang for their buck.” By taking control of the budget process, the Kansas Legislature can create a streamlined, transparent approach that funds only essential services. 
This will clarify that government spending should be limited, targeted, and driven by performance, ultimately benefiting taxpayers.

Shifting Toward Transparent, Efficient Budgeting
Under the previous model, Kansas lawmakers often had mere days to review the governor’s budget report, with a complete budget bill only arriving weeks later. This limited timeframe hindered careful analysis and frequently led to budget bills packed with provisos—conditions attached to budget items without proper legislative scrutiny. These last-minute additions diluted transparency and often introduced spending items that lacked accountability.

The Special Committee on Legislative Budget will allow lawmakers to begin budget reviews two months before the legislative session. This proactive, year-round approach enables them to assess agency budget requests through a performance-based lens, positioning Kansas to eliminate unnecessary spending while ensuring that every dollar spent delivers measurable value for Kansans.

The approach also follows recommendations from my recent testimony before the Legislature’s Special Committee on Budget Process and Development. In my testimony, I highlighted the need for a structured, legislative-led budgeting process to keep Kansas on a fiscally responsible path. By implementing early, thorough budget reviews, Kansas is moving toward a disciplined approach that can curb government growth and, over time, provide tax relief to residents.

Kansas’s new approach to budgeting draws on effective strategies from states like Texas, Colorado, and Florida, which have long upheld responsible budgeting through spending caps and efficiency audits. As noted in previous testimony, adopting a similar model that limits spending growth to economic conditions and rigorously reviews budget priorities can help Kansas curb unnecessary government expansion and pave the way for sustainable tax relief.

A New Era of Fiscal Responsibility in Kansas
The Kansas Legislature’s decision to create its budget through the Special Committee on Legislative Budget (hopefully) marks a new era of transparency, accountability, and fiscal discipline. With lawmakers leading the process, the state can ensure resources are allocated to core functions, wasteful spending is eliminated, and taxpayer dollars are carefully managed.

This structure creates a measurable framework for budgeting. For example, Kansas agencies must demonstrate how their spending requests deliver value for Kansans through performance-based budgeting. Programs that fail to meet standards can be reevaluated or restructured, while successful initiatives receive the necessary support to continue. Such a system incentivizes less government involvement in the economy.

In addition, this budget reform can open the door to tax relief over time. Kansas lawmakers are building a foundation for a leaner budget by focusing on limited, essential government functions. When spending is controlled and wasteful practices are eliminated, tax cuts become sustainable, benefiting Kansas residents and fostering a healthier economic environment.

Conclusion
​With the Special Committee on Legislative Budget, Kansas has taken an important step toward responsible budgeting, following the examples of fiscally disciplined states. This new approach prioritizes taxpayer interests and establishes a transparent and accountable system that Kansas citizens can trust. As the committee begins its work, Kansas will benefit from a budget that upholds the principles of limited government and financial stewardship. This will ensure taxpayer dollars are spent wisely and pave the way for potential tax relief in the future.

Originally published at Kansas Policy Institute.

​​Kansas has long been a critical player in the Heartland, but its recent job performance reveals progress and potential pitfalls. 

As of September 2024, Kansas’ unemployment rate sits at 3.3%, up from 2.6% the prior year, signaling a tightening labor market despite steady job growth. Over the last twelve months, Kansas added around 19,000 jobs, reflecting a 1.3% increase in nonfarm employment. 
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While this growth is commendable, it lags behind the national average of 1.6% and the state’s regional peers, such as Missouri (2.9%) and Nebraska (2.2%).

Kansas is at a crossroads. 

Although its policies have produced moderate gains, the state must embrace more aggressive, pro-growth reforms to remain competitive. By examining neighboring states and successful models like Texas and others, Kansas can chart a path toward stronger economic growth, job creation, and greater prosperity.

How Kansas Compares
Compared to its neighbors, Kansas’ job creation numbers show mixed results. 

Missouri, for instance, has been more aggressive in attracting business investment, contributing to a lower unemployment rate and faster job growth. Nebraska’s low unemployment and focus on maintaining a favorable tax climate have made it a regional standout.

Kansas’ employment growth rate of 1.3% over the past year is notably slower than Texas’s, which added 327,400 jobs (a 2.3% increase) over the same period, with an unemployment rate of 4.1%. While the one percentage point difference in annual job growth between the two states may not seem like a lot, each percent matters when considering how long it takes employment to double. The rule of 72 calculates how long a percent will double by taking 72 divided by that percent. So, the 2.3% in Texas would double employment every 31 years, while the 1.3% in Kansas would take 55 years to double. 

While the unemployment rate is lower in Kansas than in Texas, the labor force participation rate–the share of people working or looking for work–has been declining in Kansas while increasing in Texas in recent months. When people leave the labor force, this can artificially reduce the unemployment rate as fewer people are working or looking for work and likely end up on safety net programs, reducing economic output.

This comparison highlights Kansas’s room to grow, particularly given its rising unemployment rate over the last several months.

Pro-Growth Policies for Kansas
To ignite its economic potential, Kansas should prioritize a suite of pro-growth policies aimed at boosting private sector investment, reducing the tax burden, and unleashing the full potential of its workforce. Here are a few strategies Kansas could adopt:

• Lowering Taxes: One of the main factors driving businesses to states like Texas is their low-tax environment. Kansas should reduce income and corporate taxes to make it more attractive for businesses and skilled workers. A comprehensive tax overhaul that shifts away from taxing income and toward more consumption-based taxes would align Kansas with the most competitive states in the nation. The tax changes from the 2024 Special Session of the legislature should be viewed as a starting point, not the end game. Those changes allowed Kansas to keep treading water and not make true progress.
• Deregulation: Excessive regulations stifle entrepreneurship and limit business expansion. Kansas can create a more business-friendly environment by cutting red tape and streamlining licensing processes. Texas has long prioritized regulatory reform, contributing to its economic success. Kansas could follow suit by reviewing and removing outdated or overly burdensome regulations, especially in the manufacturing and technology sectors.
• Universal School Choice: Expanding access to high-quality education through universal school choice would be one of the best long-term investments in Kansas’ future. As seen in other states, providing parents with the freedom to choose the best educational environment for their children fosters competition and improves outcomes across the board. This could help Kansas build a more dynamic workforce, ensuring students are better prepared for high-paying jobs.
• Spending Restraint: Kansas must keep its budget in check to avoid over-reliance on government intervention in the economy. By implementing spending caps tied to population growth and inflation, Kansas can ensure that the government lives within its means, reducing the need for future tax increases and creating a better business climate.
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Looking Forward
Kansas has all the tools to succeed: a strong agricultural base, a growing manufacturing sector, and a skilled workforce. However, without significant policy changes, it risks falling behind its neighbors and losing out on potential economic gains. By focusing on tax cuts, deregulation, education reform, and responsible government spending, Kansas can attract more businesses, create jobs, and set itself on a course for long-term prosperity.

Hello everyone,

It’s a pleasure to be with you today. As one who believes strongly in free markets and individual liberty and has served as the chief economist of multiple think tanks and at the White House’s Office of Management and Budget, I’ve come from Texas not with barbecue, as you also have delicious barbecue, but with a recipe for economic prosperity that I hope you’ll find equally savory.

It’s great to visit Kansas and contribute to the fantastic work at the Kansas Policy Institute. My business at Ginn Economic Consulting works with KPI and 14 other think tanks nationwide. In these capacities, I hear of the attention that Kansas receives for its past tax cuts without spending restraint and current efforts for tax relief.

Kansas has been in an economic slow cook for decades, trailing behind national averages in job growth, population increases, and economic output. Much like a poorly tended grill, high taxes, and selective business subsidies have smoked out potential growth, leaving behind more stagnation than sustenance.

Let’s chew over some numbers: From 1979 to 2022, Kansas's job growth limped along at just 53% compared to the national average of 88%. Imagine the vibrancy of having an additional 451,000 jobs in the state—jobs that could have been fostered with more competitive tax policies. Moreover, Kansas has seen a net exodus of nearly 198,000 residents since 2000, driven away by a tax environment as welcoming as a blizzard in May. 

The states with the lowest tax burdens saw an influx of 4.6 million people from domestic migration during the same period, while the high-tax states watched 10.7 million residents pack up and leave. In the most recent IRS data, Kansas lost $2.1 billion in adjusted gross income due to people moving out since 2017.

In May 2024, Kansas's unemployment rate ticked up to 2.9%, a slight increase from 2.8% but a revealing one. The total nonfarm payroll employment saw a marginal uptick by 100 jobs last month. Beneath this weak report, there was more weakness as the private sector lost 300 jobs while the government added 400 jobs. This isn’t job growth; it’s a reshuffle at a high cost to private-sector workers. 

And this is a trend we've seen before. Over the past year, Kansas has seen an overall increase of 24,000 jobs, with the private sector contributing 18,700 and the government sector adding 5,300, or about 20% of the total.

Milton Friedman once quipped, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” In Kansas, if you continue to rely on excessive taxing and spending for growth, you will find yourself short on more than just jobs and people but on opportunity that drives prosperity.

During the recent special session, the Legislature passed several measures to attempt to boost the state’s economic prospects. One notable legislative action was passing a $3 billion STAR bond to attract major sports franchises. Investing in sports is like predicting Kansas weather—unpredictable and always exciting. There is potential for economic rain, but you might be in a financial storm without careful budgeting and rigorous oversight. 

While what is seen is the possible construction, new jobs around, and new tax revenue, the unseen is costly. This includes the poor precedence for other wasteful acts by the government, higher taxes on those nearby and over time, and the lack of knowledge about what will happen over the next 30 years to the teams, the community, or other costs that come with government planning.

Moreover, the recent special session saw positive efforts for broad tax relief, with the key being reducing income tax brackets from three to two, which is a step toward a much-needed flat income tax. Starting in tax year 2024, married Kansans filing jointly would have their taxable income taxed at 5.2% up to $46,000 and at 5.58% above that amount. The changes should significantly impact Kansas by reducing the tax burden and unleashing economic growth as people are incentivized to save, invest, and work. However, the effectiveness of these measures will depend heavily on accompanying spending restraint.

Let’s talk about property taxes. Kansas has started the pit on property tax relief, but it’s time to cook it. Tentative tax relief discussions this year hinted at significant cuts, but Kansas should solidify this with a constitutional amendment to limit levy increases. Think of it as putting a leash on a dog prone to running off—you ensure it’s safe and always in sight. The amendment should cap annual increases as low as possible if property taxes increase at all, providing predictability and stability for homeowners and businesses alike.

Regarding income taxes, flattening the income tax would turn Kansas from a flyover state into a destination. This move would simplify the tax code, making it fairer and less of a headache—because the only thing Kansans should worry about rising are the sunflowers. While the Legislature tried it this year, you should keep this as part of the approach next time.

The reason why is easy to see. States with lower tax burdens consistently show superior economic growth trends; between 1998 and 2022, the ten states with the lowest tax burdens averaged 51% growth in private-sector employment, compared to 34% for the states with the highest burdens. Kansas managed a modest 16% growth during this period, ranking 44th.

Kansas is sitting on a $4 billion reserve—it's like having a savings account when you’re deep in credit card debt. You should use this wisely with a responsible budget model that KPI has put forward for years now, allowing spending to grow no more than by population growth plus inflation, preferably by much less to overcome past spending excesses. 

This isn’t just tightening the belt; it’s ensuring you can still afford it in the future. Responsible budgeting ensures fiscal sustainability and prevents the state from falling into the cycles of budget shortfalls and hasty tax hikes that have plagued Kansas in the past. By following this approach, over-collected taxpayer money, called a “surplus,” can be returned by cutting a flat income tax rate to zero as quickly as possible.

Kansas has seen its share of financial missteps, but now is the time for bold action. The legislative decisions made today will determine the state’s economic future. Legislative candidates, you are positioned to lead Kansas into a new era of fiscal responsibility and economic growth. 

The decisions made in the coming years will determine whether Kansas continues along the path of stagnation or redirects toward prosperity. Consider these policy recommendations not just as suggestions but as necessary steps toward securing a thriving economic future for Kansas.

Kansas must also embrace responsible budgeting for these tax cuts to be sustainable. The state should learn from the lesson of excessive spending during the last decade’s troubles, which led to deficits and foolish tax hikes. In fact, the 2025 General Fund budget is 69% higher than in 2017 when Governor Kelly took office, or $3.7 billion higher than inflation over this period. 

Reining in this excessive use of taxpayer money to spend it on only limited roles outlined in the state’s constitution would provide opportunities for strategic budget cuts and increases of less than the rate of population growth plus inflation. This responsible approach helps ensure fiscal sustainability without compromising essential services.

Thank you for your dedication to Kansas and your commitment to principles that enhance not just the economy but also liberty. You can help ensure Kansas becomes a beacon of fiscal responsibility and economic success, where every resident wants to stay and others are eager to join. Roll up your sleeves, sharpen your pencils, and get to work on policies that let Kansans prosper. After all, as Friedman would say, "Nothing is so permanent as a temporary government program"—aim for long-term policies with fewer tradeoffs to support the most opportunities.

​Thank you, and if you’d like to continue this conversation, I invite you to connect with me at [email protected] and subscribe to my newsletter at www.vanceginn.substack.com. Let’s work together along with the great folks at KPI to create a future where Kansans can truly prosper.