Those who oppose tax reform in Kansas say we can’t compare Kansas to states like Texas and Florida, two states which have no state income tax. They point to special advantages these states purportedly have, such as oil or tourism revenue. Kansas has nothing like this, they say.
But Kansas Policy Institute has released analysis indicating that there’s another reason why these states have zero income tax: they simply spend less.
According to the KPI analysis (a one-page document available at Controlling Spending is the Secret to Low Taxes), “The secret to having a low tax burden is to control spending, and that’s exactly what [no income tax] states do.”
Continuing, the study finds: “According to the National Association of State Budget Officers, the states with no income tax spent an average of $2,444 per resident (total state funds) in 2010; the rest of the country spent $3,572 per resident, or 46% more. Kansas spent $3,216 per resident, or 32% more than the states with no income tax.” In this context, “total state funds” excludes federal funds and expenditures from the sale of bonds.
These findings parallel my research, which examined state spending using a different measure — total state spending, including federal funds. I concluded “… states with low or no income tax generally spend much less than Kansas. Using figures I compiled for 2010, Kansas state spending per person is $4,923, which ranks it 35th among the states. Only 15 states spend more than Kansas, on a per person basis. Texas, with no income tax, spends $3,703 per person. Florida, another state with no income tax, spends $3,300 per person.” (See Kansas spending is the problem.)
Generally states that spend less tax less, and vice versa. Low state spending and taxing means that a state leaves more resources in the hands of the productive private sector, instead of burdening its citizens with an expensive and inefficient state government.
For this year, Kansas Governor Sam Brownback has proposed only a slight reduction in general fund spending. Last year the Kansas Legislature lost three opportunities to reduce the cost of state government. Three bills, each with this goal, were passed by the House of Representatives, but each failed to make through the Senate, or had its contents stripped and replaced with different legislation. See In Kansas Legislature this year, opportunities for saving were lost.