By EARL WATT
• Daily Leader
There are three main legs to the Kansas economy: agriculture, energy and aviation.
Grain prices have fallen as low as 30 percent what they were two years ago. Natural gas prices have fallen to 30 percent over the past two years and corn is down to 60 percent it value. Aviation construction is at a low. Kansas was able to avoid the early effects of the slow economy, but the effects are now undeniable.
“This is the reason Kansas is late getting into the crisis and late getting out,” Representative Carl Holmes said. “All that is less income.”
The aviation industry has also taken a hit in the down economy which has effected revenues in Wichita.
“I had opportunity to go through Spirit facilities where they make new Dreamliner fuselage section,” Holmes said. “They can produce one per day. Right now, they are doing one per month. Most of the workforce is laid off.”
With lower prices, the Kansas economy has provided less tax revenues to the state, which has caused the Legislature to look for ways to fear the near $600 million shortfall.
“Everyone talks about jobs, but capital gains went to zero, ag is hurt with low grain prices, oil and gas prices are down, and aircraft is hurt because no one is buying aircraft.”
Some decisions at the state level the past few years may have led to the Kansas economy being more difficult.
Several insurance companies moved to Missouri when unfavorable regulations forced them to relocate. The Kansas Department of Health and Environment used CO2 regulations that did not exist as a reason to hold up two coal-fired electrical plants from being built in Holcomb. While Gov. Mark Parkinson has since relaxed some of the resistance, the fear of CO2 regulation in a proposed Cap and Trade plan in Washington has all coal plant production halted across the nation, Holmes said.
“That plant would have been very beneficial to Western Kansas,” Holmes said.
To have a strong recovery, Holmes said the focus should be on creating an environment that is favorable to creating jobs.
“A business-friendly environment is jobs,” he said. “Jobs create revenue.”