Kansas’ unemployment rate continues to decline, dropping to 5.4 percent in December, after dipping below the 6 percent plateau in October for the first time in many months.
Landon Fulmer, Gov. Sam Brownback’s chief of staff, delivered that good news about the state’s jobless rate to a large audience at the First Friday Forum at Washburn Towers, 526 S. Main St., Ottawa.
“The unemployment rate was 6.3 percent when the governor came into office, and now it’s dropped to 5.4 percent, and we think that it will continue to drop,” Fulmer said.
Fulmer also was bullish on the business climate in Kansas.
“Before 2012, the record number of business start-ups in one year in Kansas was 13,500. We had 16,100 new business start-ups in Kansas in 2012, and that bodes very well for our tax base and our economy,” Fulmer said.
Fulmer also talked about Kansas’ competitive tax rates, which he said have made the eastern part of the state near the Kansas City metro area more competitive for new business start-ups and new residents, compared to neighboring Missouri.
“If you look at Kansas City, it’s divided almost equally between Kansas and Missouri,” Fulmer said.
But when Kansas’ lower tax rates and better schools and roads are factored in, Fulmer said, it should enhance Kansas’ ability to lure new businesses and jobs to the Kansas side of the metro area.
The Brownback administration’s goal is to get to a zero income tax rate in Kansas, Fulmer said. The chief of staff knows Brownback’s tax policies well. Fulmer, a native Kansan and graduate of Tabor College in Hillsboro, has a long history with the governor, dating back to a 2002 internship he served with Brownback when he was a U.S. senator. After graduating from college, Fulmer spent seven years working for Brownback in Washington, D.C. Fulmer was the governor’s former policy director and was promoted to chief of staff in April.
When economic analysts and legislators talk about states with zero income tax, Fulmer said, they usually talk about Texas and Florida.
“But I like to look at New Hampshire as the model state,” Fulmer said. “New Hampshire has no income tax, and it is growing faster than any state in its region, 6 percent last year compared to other neighboring states’ 3 percent growth, because people are moving from Boston, Bangor, Maine, and [other neighboring population centers], and new businesses are starting up or relocating to New Hampshire to take advantage of the state’s zero income tax.”
The governor is committed to funding education and building the roads the state has promised to build, while maintaining a balanced budget, Fulmer said.
One audience member expressed concern about the governor’s plan to eliminate the Kansas mortgage interest tax deduction, and what that would mean for low-income families who rely on that tax credit.
Fulmer said the governor’s plan would double the standard deduction for the head of a household from the current $4,500 to $9,000, and calls for income tax rates in the lower income bracket to drop from the current 3.9 percent to 1.5 percent in the next four years.
“I think it’s difficult to find a scenario where a taxpayer would pay more income taxes under our plan, than they would if they still had the mortgage [interest tax deduction],” Fulmer said. “The governor’s plan to lower the income tax rate and provide couples with the standard $9,000 deduction would eliminate the need for incentives like the mortgage interest deduction.”
The governor’s chief of staff also talked about Brownback’s desire to change the selection process for state Supreme Court justices to match the federal selection system where the governor would nominate a prospective justice, which the Senate would either confirm or deny.
Under the current selection process, a Supreme Court Nominating Commission submits a list of three qualified individuals to the governor, who makes the selection. The commission is composed of five lawyer members selected by the Kansas Bar Association and four non-lawyer members appointed by the governor.
Richard Nienstedt, Ottawa’s city manager, thanked Fulmer on behalf of the sponsors of the forum for filling in at the last minute, when featured speaker Steve Anderson, the governor’s budget director, was summoned by a legislator and could not be in Ottawa Friday. The sponsors also thanked state Sen. Caryn Tyson, R-Parker, for arranging for Fulmer to be at the forum.
Nienstedt also told audience members it would be the last Friday Forum at Washburn Towers. He said the First Friday Forum scheduled for March 1 would take place at 10 a.m. at the forum’s new monthly meeting location: Neosho County Community College, 900 E. Logan St., Ottawa.