A Second Opinion from the Manhattan Mercury, Jan. 8
Kansas hasn’t enjoyed a big dose of good financial news in a long time, and given the degree of budget turmoil, Kansans would be wise not to hold their breath waiting for great news.
Still, the first revenue report of 2017, if not a blockbuster, was positive; tax collections in December exceeded estimates by $6.2 million, or 1 percent. Even better, the report was the second in a row in which collections exceeded projections; The December report, for November’s collections, topped estimates by 0.3 percent.
It’s easy to make too much of this, particularly given that state officials, weary of watching revenue fall short of projections, — sometimes by tens of millions of dollars — sharply lowered their forecasts last November.
The immediate upshot of those recalculations was a budget shortfall of about $345 million in the present fiscal year, which ends June 30, and a shortfall of almost $600 million more the following fiscal year.
If the new estimates are indeed more accurate as well as easier to meet, they can serve the state well. In addition to being a source of sorely needed optimism about the future, reliable estimates are essential to sound financial planning.
A regional economic survey whose release coincided with the Kansas revenue report offers a bit more reason for optimism about the state’s economy.
The Mid-American Business Conditions Index, overseen by Creighton University economist Ernie Goss, showed solid regional economic growth in the last two months. The survey covers nine Midwest and Plains states. In addition to Kansas, they are Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Scores based on various economic factors run from zero to 100, with scores below 50 indicating declines and scores above 50 reflecting growth. As a whole, the region’s index improved from 43.8 in October to 46.5 in November to 53.1 last month.
Kansas wasn’t the leader, but neither, for a change, was it the laggard. Its index rose from 44.4 in November to 51.1 in December. That’s not great, but it’s progress.
In comparison, both Missouri and Nebraska’s indexes exceeded 55, with Missouri’s 57.1 being the highest in the region. Oklahoma’s index was the only one below 50; it was 48.8 in December, but that was up from 43.3 in November.
Each state has its own assets and problems. For Kansas, correcting reckless tax policies won’t be a panacea, but will help restore the financial stability that can create opportunities for prosperity that have been few and far between in recent years.