Letters to the Editor

Letter: Data revisited

April 4, 2014

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To the editor:

Yes, the report issued by the Governor’s Council of Economic Advisors comparing the Kansas economy to that of several peer states was not positive. That should be cause for concern. This is surprising given that no matter how you cut the data, states with lower taxes tend to have stronger economies.

Now being a researcher at heart, I downloaded the report and read through it. Those familiar with economics understand that there are leading indicators as well as lagging indicators. In other words, employment and even GSP metrics tend to be lagging — we see improvement well after other metrics improve. Unfortunately most of the metrics in this study are employment related — lagging indicators that tend to improve later in the cycle.

Also recognize that the Kansas tax cuts have not really been in place that long — realtively speaking. So I searched for leading indicators and found two: building permits and initial claims for unemployment. So how is Kansas doing in these? Both of these metrics are significantly above the peer group. In fact the building permits increased over twice that of the peer group. So if we want to be honest and fair, the right metrics are moving and in the right direction. This is a good thing.

Perhaps I’m just being an optimist and these tax cuts will prove to be a fiasco and produce results different from what we see in different states. But at the very least, we are way too early to say the plan is not working and that there is preliminary data to show that it is.

Comments

Cille King 1 year, 1 month ago

Building permits present one indicator. However, the more telling indicator is the value of the construction. 10 permits for 10 buildings valued at $100,00 = 1 million in construction. 1 permit for 1 building valued at $1 million would equal the same.

In the US Census data, for 2013, Kansas ranked only 3rd of the 6 states in the study for value of residential construction and not that far ahead of the last 2 states.

In thousands: Colorado $5,897,200 Oklahoma $2,272,276 Missouri $2,104,251 Kansas $1,399,345 Nebraska $1,268,495 Arkansas $1,086,972

http://www.census.gov/construction/bps/txt/t2yv201312.txt

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