 Originally published at Kansas Policy Institute.
A new Kansas state audit shows taxpayers have paid a steep price for property tax exemptions. This is because these political choices just shift the burden of paying for government spending from selected winners to losers. The Kansas Legislative Division of Post Audit estimates that property tax exemptions tied to Industrial Revenue Bonds reduced local government tax revenue collected by $1.1 billion from 2010 through 2024. This includes $436 million from school districts, $316 million from counties, $182 million from cities, and $151 million from hospitals, townships, and other local governments. The real cost to taxpayers is higher because Kansas does not fully track the sales tax exemptions tied to these projects, nor does it account for the opportunity cost of those exemptions. Three related problems stand out. Government Cannot Pick Winners WellSupporters say tax incentives bring jobs and investment. That may happen. But the real question is whether politicians can allocate money more effectively than people in the marketplace. Usually, they cannot. Businesses risk their own money. Government officials risk taxpayers’ money. That changes the incentives. Politicians receive praise when they announce a new project. They hold press conferences and cut ribbons. The costs are spread across taxpayers for years, often with little public attention. As I explained in “Subsidies Cost Kansans Even When Revenues Rise,” every special deal has an opportunity cost. Money used to benefit one company cannot also lower tax rates for every business, reduce property taxes for homeowners, or improve core services. Markets reward businesses that serve customers. Corporate welfare rewards businesses that win political approval. Nobody Knows the Full CostThe audit also shows how weak the state’s cost estimates have been. Auditors reviewed 23 projects and found that some cost-benefit analyses failed to capture the actual property tax impact by enormous amounts. Estimates ranged from 94 percent too low to 6,065 percent too high. State Sen. Joe Claeys called the process “compliance theater.” That description fits. A cost-benefit study should help policymakers make better decisions. When estimates miss reality by thousands of percent, the study becomes little more than paperwork used to justify a deal already favored by officials. Oversight was also weak. Sedgwick County found at least 112 property tax exemptions that were never sent to the Board of Tax Appeals for approval as required by law. County officials said the problem may have continued for as long as 30 years. If governments cannot measure the costs or follow their own rules, taxpayers should question why they are handing out special deals at all. Special Deals Grow GovernmentEvery incentive requires applications, reviews, exemptions, reports, compliance checks, and audits. The system becomes more complicated while accountability becomes weaker. Kansas has used corporate incentives for decades, yet the state still struggles with long-term growth. The 2026 Kansas Green Book shows Kansas has ranked poorly in private-sector job growth, wage growth, economic growth, and domestic migration over the past quarter-century. Special favors have not fixed those problems. Kansas Needs Broad ReformKansas does not need better corporate welfare. It needs a better economic policy. Lawmakers should phase out Industrial Revenue Bond tax abatements and replace them with less spending and lower tax rates to help every business. This could also include simplifying regulations, speeding up permitting, and keeping state spending from growing faster than population growth plus inflation, as recommended by the Sustainable Budget Project. These reforms would help companies already operating in Kansas, not just businesses threatening to move unless they receive a subsidy. Equal Rules Produce Better ResultsMilton Friedman often reminded us that people spend their own money more carefully than they spend someone else’s. The audit proves his point. Kansas taxpayers gave up at least $1.1 billion through a system with weak estimates, missing data, and poor oversight. Meanwhile, favored companies received benefits that ordinary businesses and homeowners did not. Economic development should not depend on which company hires the best lobbyist or negotiates the largest tax break. The best incentive Kansas can offer is equal treatment: lower taxes, restrained spending, simple rules, and a government that protects opportunity instead of choosing winners. That approach may produce fewer ribbon cuttings. It will produce more lasting prosperity.
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 Originally published on Substack.
Kansas now has more rural hospitals at immediate risk of closure than any other state, according to KAKE News. That is serious. Rural healthcare access matters. Families should not have to drive for hours to access emergency care. But if Kansas treats this only as a hospital funding problem, it will miss the real issue. Rural hospitals are not failing in isolation. They are struggling because too many rural communities face the harsh reality of shrinking and aging populations. Both of these trends are results of and contributors to lost economic momentum. Healthcare follows people. A hospital needs patients, workers, and a local economy strong enough to support private insurance, payrolls, housing, and tax revenue. When young adults leave, the payer mix is harder to overcome. When employers or workers disappear, private coverage falls. As the remaining population ages, demand for care rises while the economic base shrinks. That is not a messaging problem. It is math. KPI’s 2026 Kansas Green Book shows Kansas is lagging many competitor states in private-sector job growth, wage growth, and domestic migration. People are voting with their feet for places with better opportunities. Rural Kansas feels that first and hardest. The predictable political response is another subsidy, another program, another temporary patch. Sometimes emergency help may be needed to prevent immediate harm. And “critical access” facilities remain important across the Great Plains, but bailouts cannot make towns grow. They cannot replace missing workers. They cannot rebuild a private-sector economy. Kansas should not confuse compassion with kicking the can down the road. A better approach starts by admitting that strong communities foster strong hospitals. That means Kansas must become a better place to live, work, build, and invest. The Green Book points to one major barrier: too much government for too few people. Kansas ranks near the bottom nationally in residents per government unit, meaning Kansans support far more layers of government than most Americans. That drives overhead, duplication, and higher property taxes. Those costs matter. A farmer feels them. A small manufacturer feels them. A young family feels them as they decide whether to stay or leave. A hospital feels them when the surrounding community gets older, smaller, and incomes shrink. Economic growth is healthcare policy. If Kansas wants stronger rural hospitals, lawmakers should focus on the conditions that help rural communities grow. Spend less. Tax less. Regulate less. Make it easier to start a business, hire workers, expand telemedicine, and attract families back to small towns. The current path asks taxpayers to subsidize decline while ignoring why the decline is happening. That may buy time, but it will not restore rural Kansas. Hospitals are mirrors of the communities they serve. If the community weakens, the hospital eventually will, too. Rural hospitals need more than another patch. They need rural Kansas to grow again.  Originally published at Kansas Policy Institute.
My earlier Kansas Policy Institute piece, “Kansas Should Welcome AI Growth, Not Zone It Away”, drew a lot of feedback. Much of it came down to four concerns: water, electricity, zoning, and whether data centers really help local communities. Those are fair questions. Big projects often face scrutiny, and Kansans deserve answers about how new development will affect their communities. This is why there should be transparency for good decisions. A data center is a physical building full of servers, storage, and networking equipment that makes online services work. That is what companies mean by “the cloud”: not something floating in the sky, but real infrastructure on the ground. That infrastructure supports online banking, telehealth, logistics, streaming, remote work, AI tools, school platforms, and the digital services people use every day. The Goldwater Institute calls data centers “the unseen but indispensable infrastructure of the modern world.” That is right. They are not a fad. They are part of the digital economy’s backbone. That matters because Kansas is not deciding whether the digital economy will exist. It is about deciding whether the infrastructure behind that economy will be built here or elsewhere. Water is a major concern, especially in places that worry about long-term water supply. This specific concern is not theoretical in Kansas. The Ol’ West saying of “whiskey is for drinking and water is for fighting” shows no signs of lessening anytime soon. The Kansas Department of Commerce says some facilities use air-cooled systems that use no water for cooling, while others use closed-loop systems that recirculate water rather than constantly drawing fresh supplies. A recent University of Texas review made the same point more broadly: water use depends heavily on cooling design, local climate, and power choices. So “data centers use water” is true, but incomplete. The real questions are how much, under what system, and under what local conditions. Electricity is another concern, particularly whether ordinary households subsidize these projects. Kansas recently set rules requiring large-load customers to be responsible for transmission and other infrastructure upgrades needed to serve the facility. Kansas law bars eligible data centers from receiving discounted electricity rates for economic development. In other words, the policy baseline in Kansas is not “give them cheap power and send the bill to everybody else.” It is closer to: if a project wants to come, it has to meet Kansas’ rules. Goldwater’s more recent work makes the broader point well: data centers are not “breaking the grid”; bad pricing and supply constraints are. If the electricity rules need improvement, improve them. We need to be careful not to blame one visible industry for exposing the weakness. Again, this isn’t theoretical. The Kansas Corporation Commission is hardly a consumer watchdog, and sweetheart deals for larger users (we’re looking at you, Panasonic) are troublingly common. Skepticism about how these policies are applied is understandable, given past issues with large-user agreements. Transparency and accountability remain important. The third concern is zoning and “green fields.” This is often where a debate about one project becomes a broader debate about growth itself. Communities can have sensible setbacks, traffic planning, noise standards, and local review. But those tools can easily slide into not-in-my-backyard (NIMBY) arguments if they become a way to block any large investment that feels unfamiliar. A recent report on Kansas City zoning fights showed just how quickly that can happen. Kansas should protect property rights and local review without turning zoning into a backdoor ban on the infrastructure behind modern commerce. Then there is the concern that data centers do not employ enough people. Fully functioning data centers typically employ about 100 people, which isn’t insignificant in some areas. The full economic impact on a community can be much larger in some cases, however. The gains also include major upfront capital spending, years of construction work, demand for local contractors and suppliers, utility investment, and potentially, a longer-run property- and sales-tax base. The long-term tax benefits depend on whether local elected officials use the new revenue to reduce the burden on existing taxpayers or to increase government spending. A PwC report for the Data Center Coalition found that in 2023, the industry supported 4.7 million jobs nationwide and contributed $727 billion to U.S. GDP, with each direct job supporting more than six others elsewhere in the economy. NetChoice makes a similar case, citing the local tax and infrastructure benefits that states have seen from enterprise data centers. When you consider the gains in Kansas, the KC Tech Council notes benefits for businesses around the data center, or those that pop up near it, allowing for a larger positive effect than just the data center. There is also a bigger strategic point to consider. If data centers are not built here, they will be built somewhere else. The demand for AI, cloud services, digital payments, and streaming will not disappear because Kansas says no. The investment, tax base, and competitive advantage will just move to another state or another country. And that matters because the race for AI leadership is not abstract. U.S. policymakers increasingly treat AI infrastructure as part of economic and national-security competition. China benefits if America talks itself out of building the physical infrastructure that will underpin the next economy. There is some evidence of direct Chinese orchestration of local anti-data-center campaigns. But the strategic logic is obvious: if we do not build, our rivals will. The question each person must decide is whether the potential gains are worth the potential risks after fair consideration of the facts. Kansas does not need fear-driven policy when it comes to data centers. Along with the ideas about data centers posed by the Buckeye Institute recently, Kansas should consider establishing clear property-rights rules, honest utility pricing, transparent local review, and a willingness to weigh real tradeoffs without turning anxiety into prohibition. That approach allows Kansas to remain competitive while respecting Kansans where these projects may locate.  Originally published on Kansas Policy Institute.
Kansas wheat country is facing a hard year. Drought has damaged winter wheat across the Plains, and the latest crop tour estimates point to a much smaller harvest than last year. That should matter to every Kansas policymaker, not just farmers. For many farm families in Kansas, this is not an abstract policy discussion. A weak wheat crop means lower income, difficult insurance decisions, stress on operating loans, postponed purchases, and real uncertainty about what comes next. Many producers are carrying a heavy burden this season. The 2026 Wheat Quality Council tour projected Kansas wheat yield potential at 38.9 bushels per acre, below the recent tour average and well below last year’s strong harvest. Kansas farmers produced nearly 347 million bushels in 2025 with an average yield of 51 bushels per acre. Some models now suggest production could fall around 31% from last year. Weather is not something Topeka can control. But economic resilience is. That matters not only to producers, but to the entire Kansas economy. When agriculture takes a hit, the ripple effects reach equipment dealers, truckers, rail, grain handling, processors, Main Street businesses, and local communities across the state. Kansas has always depended heavily on agriculture, and that should remain a strength. Wheat, cattle, sorghum, corn, soybeans, ethanol, milling, rail, trucking, and food processing are part of the state’s economic identity. But a rough wheat year exposes a bigger issue: Kansas needs a more resilient economy built on lower costs, more investment, more entrepreneurship, and more diversity in private-sector growth. That does not mean abandoning agriculture. It means strengthening the entire economic ecosystem around it. Farmers are already dealing with low prices, high input costs, interest rates, equipment expenses, property taxes, and federal policy uncertainty. One recent farm-income outlook projected Kansas net farm income at $8.67 billion, down about 5%, with crop producers pressured by weaker prices even when yields improve. A bad wheat harvest makes the squeeze worse. The wrong answer is more dependency on subsidies, bailouts, or central planning. Those may temporarily soften losses, but they do not build long-term resilience. They often lock producers into Washington’s political cycles and discourage the kind of innovation Kansas needs. The better answer is a stronger private economy. Start with taxes and spending. Kansas collects and spends too much relative to faster-growing states. The 2026 Green Book makes the competitiveness problem clear: Kansas ranks in the middle of the pack on taxes while stronger states keep moving ahead. Kansas cannot build resilience by making production more expensive. That is why a Responsible Kansas Budget matters. Spending restraint is not just a budget exercise. It is an economic development strategy. When government spends less, it can tax less. When it taxes less, farmers, families, and businesses keep more of their own money to invest, save, hire, and adapt. Kansas should also make it easier to build value-added agriculture. More processing, milling, biofuels, livestock capacity, storage, logistics, and specialty manufacturing can help farmers capture more value closer to home. That requires faster permitting, lower energy costs, better infrastructure, and fewer regulatory barriers. Energy abundance is especially important. Agriculture is energy-intensive. Fertilizer, irrigation, grain drying, trucking, rail, refrigeration, processing, and manufacturing all depend on reliable and affordable energy. Kansas should welcome new generation, transmission, private power arrangements, and market-based energy solutions instead of letting politics block supply. Workforce matters too. Rural Kansas needs more entrepreneurs, tradespeople, mechanics, welders, truck drivers, nurses, teachers, and technology workers. That means better education options, less occupational licensing red tape, and a tax climate that attracts families rather than pushing them out. Kansas has already lost $361 million in AGI from domestic migration in one recent year. A resilient state cannot keep losing people and income. The wheat harvest is a warning. When one major sector takes a hit, the rest of the economy must be strong enough to absorb the shock. That strength does not come from government programs. It comes from freedom, investment, diversification, and low costs. Kansas should protect agriculture by making Kansas more competitive for everything around agriculture: energy, logistics, processing, technology, manufacturing, housing, health care, and entrepreneurship. A bad crop year is painful. But it can also clarify the path forward. Kansas does not need more government management. It needs a freer, more flexible economy where farmers and businesses can adapt faster than policymakers can write rules. That is how Kansas becomes more resilient.  Originally published on Kansas Policy Institute.
Artificial intelligence is not floating in the clouds. It runs on land, energy, fiber, water systems, skilled workers, and data centers. That means Kansas has a choice. It can become a place where the next generation of digital infrastructure is built, or it can regulate, zone, and subsidize its way into mediocrity while investment goes elsewhere. The opportunity is real. AI, cloud computing, cybersecurity, logistics, digital payments, telehealth, and advanced manufacturing all depend on data centers. Data centers are the physical backbone of a modern economy. When permitting delays, energy shortages, or regulatory bottlenecks constrain infrastructure, only the largest firms can absorb the costs. That tends to reduce competition and slow innovation. Kansas should not make that mistake. The state has abundant land, central geography, transportation access, and communities that need new investment. Western Kansas in particular has been discussed as a potential hub for development because of its land base and energy resources, even as rural communities face population challenges. Local leaders should understand the obvious: growth does not happen because officials announce it. Growth happens when private investors believe they can build, operate, and earn returns under predictable rules. Kansas has already stepped into this debate. SB 98 created a sales tax exemption for qualified data centers that commit to at least $250 million in investment and meet job requirements. I understand the intent. States are competing for capital, and Kansas does not want to be left behind. But Kansas should be careful. The best economic development strategy is not carveouts that just pick winners and losers (badly). It is a broad, low-tax, light-regulation environment where every firm can compete domestically and abroad without begging for special treatment. Tax breaks may attract headlines, but they also create resentment if local families think large users get favors while everyone else pays the bills. Concerns over water and electricity scarcity from data centers are understandable. But those concerns should be based on facts rather than flawed assumptions and predictions in questionable models. New industry in an area offers opportunities for innovation. A large dairy facility in Garden City utilizes water recycling and extraction (from the powder milk drying process) to help minimize overall usage. Data center usage would not be exactly the same, but this example does offer some reason to be optimistic that properly functioning (water) markets and prices can foster innovation amidst resource scarcity. The better path is clear: neutral rules, fast permitting, property-rights protection, transparent utility pricing, and no special burdens on one industry. Data centers will pay for the electricity, water, roads, and grid costs they impose through the marketplace. But they should not face punitive government rules just because they are politically (un)fashionable targets. The zoning fight is already spreading. Nearby jurisdictions are debating whether data centers need special approvals, waiting periods, or local restrictions. Kansas should avoid the temptation to turn every large-load project into a political food fight. Reasonable land-use rules are one thing. Moratoria, uncertainty, and industry-specific hostility are another. AI regulation creates the same risk. States across the country are tempted to write broad AI rules before they understand the technology. Kansas should reject that model. As I have argued in my work on innovation over intervention, America wins when markets are allowed to experiment, invest, and scale under predictable rules. Kansas should punish fraud, protect privacy and property rights, and enforce contracts. It should not build a state AI bureaucracy that freezes innovation before it reaches families and businesses. The energy question also matters. Data centers require electricity. So do manufacturers, hospitals, homes, farms, and schools. Rising demand is not a crisis. It is a signal of growth. The answer is more supply, faster infrastructure, better pricing, and more competition, not rationing by regulation. Kansas should encourage private power arrangements, faster interconnection, new generation, and market-based contracts. It should not force one industry to prepay for every imagined future cost while other large users are treated normally. This is an Econ 101 issue. If Kansas raises the cost of building, less will be built. If Kansas delays permits, capital will move. If Kansas uses zoning to block productive investment, families lose jobs and communities lose opportunity. The state should welcome AI growth without corporate welfare and without regulatory panic. Let data centers build. Let energy supply expand. Let local communities benefit from construction jobs, tax base growth, and long-term investment. Kansas should not fear the future. It should make itself easier to build in than the states that do.  “Tax the rich” sounds easy until lawmakers define “rich” broadly enough to hit the small business owner, farmer, physician, contractor, manufacturer, and family-owned shop trying to stay open in Kansas.
That is the danger. Soak-the-rich politics is sold as a tax on billionaires. In practice, it becomes a tax on everyday people who own assets (a farm, a local roofing business, etc.), employ workers, take risks, and often have wealth on paper but tight cash flow in real life. Kansas should want no part of that. The state already struggles to compete. The new 2026 Kansas Green Book shows Kansas remains too expensive, too fragmented, and too economically average to keep up with faster-growing states. Kansas collects about $6,597 per resident in state and local taxes and spends about $5,584 per resident, which is not the profile of a lean, low-tax growth state. It is the profile of a state asking too much from taxpayers while delivering too little growth. The results are showing up in migration data. Kansas lost $361 million in adjusted gross income from domestic migration in 2023, and nearly $8 billion over the last 30 years. People are voting with their feet. Milton Friedman was right: if you want to know what people prefer, watch what they do when they are free to choose. The worst response would be to double down on class-warfare tax policy. Kansas has many people who look “rich” to politicians but are really asset-heavy and cash-constrained. Sorry for the economist-speak. This is someone who owns a profitable small business with inventory, land, equipment, or other assets that have real value but little in the way of Scrooge McDuck hoards of cash lying around. Farmers may own land and equipment worth a lot on paper while facing low commodity prices, drought, high input costs, debt service, and uncertain yields. Kansas had 55,734 farms in 2022, down 5% from 2017 and 13.5% from 2002. These are not people sitting on piles of idle cash. They are working families with capital tied up in land, machinery, livestock, seed, fertilizer, and fuel. Small businesses face the same reality. The SBA’s Kansas profile shows small businesses are central to job creation and business formation across the state. Many are pass-through firms where business income shows up on individual tax returns. Raise top individual rates, and lawmakers are often taxing the very businesses they claim to support. That is why Kansas should avoid the path of states flirting with wealth taxes, millionaire surtaxes, exit-style taxes, and higher top rates. Those ideas may poll well in the short run, but they send a clear signal to entrepreneurs and investors: build somewhere else. Kansas cannot afford that message. The right approach is the opposite. Kansas should flatten and lower tax rates, broaden the base where appropriate, control spending, and use surplus dollars for permanent tax relief. The Legislature made progress with SB 269, which ties future income and privilege tax reductions to revenue performance and budget stabilization. That is better than letting government pocket every extra dollar forever. But triggers alone are not enough. Tax relief must be paired with spending restraint. As I have argued in my work on responsible budgeting, Kansas should limit spending growth to no more than population growth plus inflation. Better yet, given past overspending, the state should aim lower until the budget is right-sized. The issue is not whether “the rich” should pay. The issue is whether Kansas wants more employers, more farms, more startups, more investment, and more families choosing to stay. Envy is not an economic development strategy. Punishing success does not create prosperity. If Kansas wants to grow, it should stop asking how much more it can take from productive people and start asking how much more freedom it can give them to build. Kansas does not need soak-the-rich politics. It needs lower taxes, less spending, and a stronger commitment to letting people prosper.  Originally published at Kansas Policy Institute. Kansas families need lower fuel costs through more supply, less inflation, and fewer government-made costs. Fuel prices hit families fast. A gallon of gas is not just a number on a sign. It is the cost of getting to work, taking kids to school, delivering goods, that long-planned summer road trip, and keeping rural Kansas connected. According to AAA’s Kansas gas price data, regular gasoline averaged $3.961 per gallon in Kansas on May 4, compared with a national average of $4.457. Kansas is below the national average, but that is little comfort to families already squeezed by groceries, housing, insurance, utilities, and interest costs. By way of reference, the price one month ago was $3.363 and $2.834 this time last year. Affordability is not judged in Washington talking points. It is judged at the pump. Start with Econ 101: prices rise when demand increases, supply falls, or both. Gasoline is especially sensitive because oil trades in a global market. A supply shock in the Middle East, including the war with Iran and risks around the Strait of Hormuz, can hit Kansas quickly. On some level, it doesn’t matter if that barrel is pumped in Saudi Arabia, Saskatchewan, or Sumner County, KS, it’s a globally traded commodity and prices are driven by global trends. My research on oil and gasoline markets has long reinforced this point: retail fuel prices respond to movements in crude and wholesale markets, but not always smoothly or immediately. In other words, pump prices can rise fast when costs jump and fall slowly when costs ease, but not for long. That is why energy abundance matters. The Energy Information Administration reports that U.S. crude oil production reached a record 13.6 million barrels per day in 2025, up 3% from 2024. More American production does not make Kansas immune from global shocks, but it gives families a buffer. Less production, fewer pipelines, constrained refining, and more regulatory delay do the opposite. Still, crude oil is only part of the pump price. The EIA’s gasoline price breakdown for January 2026 shows regular gasoline consisted of 51% crude oil, 20% refining, 11% distribution and marketing, and 18% taxes.  That means policymakers cannot control everything, but they do control some of the costs families face.
Fuel taxes are one of those costs. The EIA reports that state gasoline taxes and fees ranged from 70.9 cents per gallon in California to 9 cents in Alaska as of January 1, 2026, while state gasoline taxes averaged about 33.5 cents per gallon. The federal government adds another 18.4 cents per gallon. Kansas’s gas tax of 25.3 cents per gallon is above the national average and adds real cost to every gallon bought by workers, farmers, truckers, and families. Some politicians respond to high fuel prices with gas tax holidays. That is political theater. It is the same kind of gimmick as sales tax holidays, temporary payroll tax cuts, homestead exemptions, and other carveouts that complicate tax systems while avoiding the real problem. A Washington Post editorial argued that gas tax holidays are good politics but bad policy because they temporarily subsidize demand during a supply shock and do little to solve the underlying issue. The economics are straightforward. If a fuel tax is suspended, pump prices may fall a little at first. But because vehicle drivers were already willing to pay the higher tax-inclusive price, part of the benefit can be captured by suppliers or offset by higher market prices, especially when supply is tight. A temporary holiday does not create more fuel, expand refinery capacity, improve logistics, or reduce inflation. It just reshuffles who receives the benefit while politicians claim credit. What they’re typically doing is reshuffling the cost to future generations who cannot vote, hoping today’s voters give them credit for “doing something.” The better policy is not to suspend fuel taxes. It is to eliminate them over time as part of broader spending restraint and more transparent infrastructure funding. Fuel taxes, which primarily fund road and highway infrastructure, are often sold as user fees, but in practice they are taxes set by politicians, not market prices. Transportation finance is tangled with federal funds, transfers, debt, and political priorities. If lawmakers want users to fund roads, they should be honest, transparent, and disciplined, not hide behind temporary tax gimmicks. The deeper problem is overspending. When governments spend too much, they must tax more, borrow more, regulate more, or inflate more. That burden shows up everywhere, including fuel prices. In my work on inflation and government spending, I’ve noted that when the money supply expands faster than the supply of goods and services, prices rise over time. Fuel shocks then land on families already weakened by general price inflation. Kansas cannot control Iran, OPEC, or global crude markets. But it can stop making affordability worse. That means rejecting gas tax holidays, eliminating fuel taxes over time, reducing and capping government spending, removing barriers to energy production and infrastructure, and avoiding regulations that make transportation more expensive. Fuel prices are shaped by oil markets, refining, distribution, taxes, and inflation. The solution is not gimmicks. It is abundance. More energy. Less spending. Lower taxes. Fewer barriers. That is how Kansas can help families keep more of what they earn and spend less just to get where they need to go.  Originally published at Kansas Policy Institute.
Kansas isn’t collapsing. That would at least get attention. What’s happening is quieter and more dangerous: the state is becoming too expensive, too fragmented, and too average to compete, while other states pull ahead. The new 2026 Kansas Green Book lays it out clearly. Kansas is not leading where it matters. It is lagging, and the reason comes down to cost. Start with outcomes. Since 1998, Kansas ranks 41st in private-sector job growth at 11.9% increase, 37th in private-sector wage growth at 160%, and 32nd in GDP growth at 201%. Since 2000, Kansas ranks 39th in domestic migration at -7%. Pages 4, 6, 8, and 10, respectively, in the PDF below. Meanwhile, competitor states like Texas and Tennessee are consistently near the top. Texas ranks 4th in job growth at 63.5% and 3rd in GDP growth at 338%, while Tennessee ranks 9th in migration at 11%. These aren’t random differences. They reflect different policy choices. People are responding to those differences. When Kansas ranks near the bottom in migration, it means more people are leaving than arriving. And when they leave, they take their income, spending, and future investment with them. So what’s driving it? Start with taxes and spending. Kansas collects about $6,597 per resident in state and local taxes, ranking 27th nationally, and spends $5,584 per resident, ranking 23rd (Pages 12 and 14). That is not a low-tax, lean-government model. It is a middle-of-the-pack approach with below-average results. Now compare that to the states that are actually winning. The Green Book shows that no-income-tax states average just $3,826 per resident in spending, far below Kansas’s $5,584 per resident (Pages 14 and 15). That gap matters. States that spend less can tax less. States that tax less tend to grow more. Kansas is choosing a different path. Property taxes are where Kansans feel it most. And this is not just a mill rate issue—it is a structural problem. The report shows 40 of 105 counties saw property tax collections more than triple between 1997 and 2025, even while some populations declined (Pages 25, 26, and 27). That is not growth. That is a system where the government keeps expanding regardless of demand. The burden shows up in real comparisons. Wichita ranks 31st-highest nationally in urban homestead property taxes and 11th-highest in urban commercial property taxes, while Iola ranks 5th-highest in rural homestead property taxes and 1st-highest in rural commercial property taxes (Pages 28 to 39). Those are not outliers. They are signals that Kansas is overloading property owners relative to other states. Why is this happening? Too much government at too many levels. Kansas ranks 48th in residents per general-purpose government unit, with just 1,493 residents per unit compared to a national average of 8,806 (Page 16). That means more overlapping jurisdictions, more administrative overhead, and more duplication. And all of it has to be funded by taxpayers. In some counties, the report shows that government jobs account for more than a third, and sometimes more than half, of total employment. That is not a private-sector growth strategy. That is a sign the public sector has crowded out productive activity. Put it all together, and the pattern is clear. Kansas is not losing because of one bad policy. It is losing because of a system that costs too much and delivers too little in terms of growth. And here is where the argument needs to be clear. This is not about chasing the lowest taxes for their own sake. It is about recognizing that cost matters in a competitive economy. When states like Texas, Florida, and Tennessee keep their costs lower—especially by avoiding income taxes and controlling spending—they attract more people, more investment, and more opportunity. Kansas does not have to guess what works. The evidence is already there. The Green Book makes another critical point: reducing state taxes alone is not enough if local government continues to expand. The benefits of state-level reform are diluted by a fragmented local system that keeps pushing property taxes higher. That is why real reform has to address both state spending and local government structure simultaneously. So what needs to change? Kansas needs fewer layers of government, not more. This requires spending that grows more slowly than the average taxpayer’s ability to pay for it. Property tax relief comes from controlling spending, not shifting burdens around. And there is a need for a tax system that rewards work and investment instead of penalizing them. Most of all, it needs to stop settling. Kansas is not failing overnight. It is falling behind year by year, ranking by ranking, decision by decision. In a world where people and businesses can move, that kind of slow drift is exactly how states lose. The good news is that it is fixable. But only if lawmakers stop confusing average with acceptable—and start making Kansas competitive again.  Originally published at Kansas Policy Institute. The Kansas House and Senate have already passed the FY 2027 budget bill, House Bill 2513, and sent it to Governor Laura Kelly. Aside from some line-item vetoes and (failed) overrides, the topline is essentially the same. Supporters are calling it responsible because it trims the State General Fund budget by $189.2 million below a roughly $11 billion total from last year while still funding selected priorities. That sounds nice. It is also not the real test. The real question is whether the budget is actually small enough, disciplined enough, and competitive enough for Kansans. It is not. The latest March 2026 revenue report makes that plain. Total tax collections came in at $577.1 million last month, which was $68.9 million below the estimate and 9.4 percent below March 2025. Since the November consensus estimate, collections have run more than $175 million below forecast. Corporate income tax receipts were especially ugly, coming in $63.5 million below the estimate for March alone. That is not a rounding error. That is the kind of softness you see when the budget is still leaning too heavily on wishful thinking. And that is the problem. Kansas is not budgeting from a position of strength. It is budgeting from a permanently inflated post-pandemic baseline and pretending that a modest trim from last year somehow makes everything fine. It does not. The updated Responsible Kansas Budget shows how far off course Kansas has drifted. From FY 2005 to FY 2026, total state spending rose from $10.6 billion to $27.8 billion, while state funds spending rose from $7.2 billion to $22.3 billion. If state funds spending had grown only by population growth plus inflation since 2005, Kansas would be spending about $12.6 billion this year instead of $22.3 billion.  That means the state is spending roughly $10 billion more per year than a responsible path would allow, with cumulative excess spending of more than $64 billion since 2005. That is not prudent budgeting. That is decades of drift.  The Legislature’s FY 2027 budget does not fix that. It barely touches it.
The Responsible Kansas Budget also makes an important point that too many lawmakers still dodge. Limiting future spending growth to population plus inflation is a good rule, but it is not enough when today’s budget is already bloated. Kansas first needs a reset. Spending should be cut back toward FY 2019 or 2020 levels, before pandemic-era spending spikes and federal cash distorted the baseline. Using 2020 as the base year, the updated RKB estimates a 2027 responsible budget of about $17.2 billion, which is roughly $10 billion less than what Kansas is now planning to appropriate. That is the debate lawmakers should be having. Instead, they are congratulating themselves for shaving around the edges. They are also missing the deeper lesson Kansas should have learned from the Brownback years. The failure was never tax relief per se. The failure was trying to cut taxes without first getting spending under control. When revenues tightened, spending stayed protected, and tax reform took the blame. The wrong lesson got burned into Kansas politics. Today’s lawmakers risk repeating that mistake by protecting an oversized budget and hoping future revenue growth will rescue them. Hope is not a budget strategy. The broader economic picture should make lawmakers even more uneasy. KPI’s 2025 Green Book shows Kansas government spending at $5,428 per resident and state and local tax collections at $6,326 per person. That is not the profile of a lean, growth-focused state. It is the profile of a state that taxes and spends too much while competitors move faster. When Kansas remains expensive, average, and slow to reform, families and businesses are increasingly moving elsewhere. And unlike Washington, Kansas cannot print money. If it spends more than it collects, the bill shows up in only two ways: higher taxes now or higher taxes later. That is why Kansans should not settle for this budget just because both chambers passed it. The House and Senate missed the big issue. Kansas does not need a slightly smaller version of an oversized budget. It needs a budget reset. Cut back toward a 2019 or 2020 spending base. Cap future growth at population plus inflation, preferably less. Use surpluses for tax relief, not bigger government. Kansas passed a budget. Kansans still need a better one.  Originally published at Kansas Policy Institute.
Kansas ranks 23rd on tax competitiveness. In a race where people vote with their feet, that is not something to be proud of. Texas has no personal income tax. Florida has no personal income tax. Tennessee eliminated its tax on investment income. North Carolina has spent years cutting rates and climbing the State Tax Competitiveness Index. And Kansas ranks 23rd overall, according to the recent release of the Tax Foundation’s Facts & Figures 2026. That is not a compliment. It is a warning. Kansas is not competing against poorly run states. It is losing in the competition against the states where people are moving to. According to IRS domestic migration data, Kansas continues to lose residents and income to faster-growing states. Kansans are not speculating about which states offer better opportunities. They are acting on it. The tax structure helps explain the exodus. Kansas ranks 26th on corporate taxes, 28th on individual income taxes, 21st on sales taxes, and 26th on property taxes, based on the Tax Foundation’s state tax rankings. Its one strong component, unemployment insurance taxes, does nothing to attract workers or businesses. Every category that drives investment and growth sits in the bottom half. The individual income tax is the clearest self-inflicted wound. A 28th-place ranking means Kansas is still penalizing work, savings, and entrepreneurship more than it should in an economy where people and businesses can relocate freely. Sales taxes compound it. Kansas carries a 6.50 percent state rate, the 9th highest in the country, and a combined state and local average of 8.78 percent, according to the Tax Foundation’s sales tax data. That burden falls directly on consumers and hits border communities hardest, especially when Missouri’s rate is lower at 8.44 percent (ranking 12th highest). Lawmakers can talk about affordability, but Kansans see the difference every time they cross a state line to shop. Property taxes pile on further. An effective rate of roughly 1.19 percent on owner-occupied housing adds one more layer to a system that keeps stacking taxes instead of simplifying them, based on Tax Foundation Kansas data. Homeowners, farmers, and small businesses feel the cumulative weight even when no single rate looks extreme in isolation. On the corporate side, Kansas runs a 4 percent base rate plus a 3 percent surcharge, creating a 7 percent top rate, as shown in the Tax Foundation’s corporate tax tables. The 26th-place ranking reflects it. Other states have been lowering rates and broadening bases for years. Kansas has not kept pace. Kansas lawmakers should already know the deeper lesson here. The state tried tax reform before without controlling spending. It unraveled. The lesson was never that tax relief fails. It is that tax reform without spending discipline fails. According to the Kansas Policy Institute’s 2025 Green Book (the new version is literally at the printers!), Kansas governments collect more than $6,300 per resident. That level of spending requires higher taxes, and higher taxes cost Kansas residents and businesses it cannot afford to lose. Every surplus spent by a government official instead of returned to taxpayers is a reform deferred. Every year of middling rankings is another year of slow, compounding loss. Kansas lawmakers say they want growth. The path is not complicated. Cut the size of government. Reduce reliance on income taxes. Lower the overall burden enough to compete with states that are actually winning. Other states are not waiting. Kansas lawmakers are. And Kansans are leaving. |
Vance Ginn, Ph.D.
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