Ongoing federal negotiations about tax increases and spending cuts are keeping Kansas employers from making investments in their operations and hiring more workers, a top state business leader said Friday.
Kent Eckles, vice president of government relations for the Kansas Chamber of Commerce, said those federal pressures are weighing on the state, despite a drop in November’s jobless rate to a seasonally adjusted 5.4 percent.
“I think a lot of it’s due to the uncertainty with what’s going on in D.C. with the ‘fiscal cliff.’ Negotiations keep going on,” Eckles said. “Our members and private sector employers in Kansas are holding off on making hiring decisions and investment decisions because they don’t know what will happen.”
President Barack Obama and House Speaker John Boehner have been meeting off and on in recent weeks to avoid the so-called fiscal cliff of expiring tax cuts and automatic spending cuts that take effect Jan. 1.
Eckles said new Kansas tax cuts that also take effect in January could help mitigate any increases at the federal level. The new Kansas cuts will exempt some 191,000 businesses from paying individual income tax and reduce the rates for all individual income tax filers.
Still, the Kansas Department of Labor said the state jobless report continues to show positive signs. The November unemployment rate was 0.3 percent lower than it was in October and a full 1 percent better than November 2011.
Interim Labor Secretary Lana Gordon said the job market is moving in the right direction. Kansas added 1,100 private sector jobs in November and employers have increased payrolls by 4,900 jobs over the past year. The November decline was the third consecutive month that unemployment rates have dropped in Kansas.
The workforce has shown slight growth in recent months, standing at 1.49 million in November, up about 7,000 people since September.
On a county level, Wilson had the highest jobless rate in Kansas at 7.8 percent. The lowest rate was reported in Sheridan County in northwest Kansas at 2.3 percent.