Tag Archives: Economics

GDP by state and industry

An interactive visualization of gross domestic product by state and industry.

The Bureau of Economic Analysis, an agency of the United States Department of Commerce, has released Gross Domestic Product figures for the year 2015. I’ve gathered this data and present in it an interactive visualization using Tableau Public. This data is grouped by states and regions, and also by major categories of industry.

Source of data is Bureau of Economic Analysis, Regional Economic Accounts. Values are in current dollars.

Of note: The list of industries is not exclusive. That is, some categories such as “All industry total” and “Private industries” contain other categories. Use caution when selecting multiple categories.

Click here to access the visualization.

GDP by State and Industry example 2016-06

Kansas economic development programs

Explaining common economic development programs in Kansas.

TIF projects: Some background
Tax increment financing disrupts the usual flow of tax dollars, routing funds away from cash-strapped cities, counties, and schools back to the TIF-financed development. TIF creates distortions in the way cities develop, and researchers find that the use of TIF means lower economic growth. Click here.

Tax increment financing (TIF) resources
Resources on tax increment financing (TIF) districts. Click here.

STAR bonds in Kansas
The Kansas STAR bonds program provides a mechanism for spending by autopilot, without specific appropriation by the legislature. Click here.

Industrial Revenue Bonds in Kansas
Industrial Revenue Bonds are a mechanism that Kansas cities and counties use to allow companies to avoid paying property and sales taxes. Click here.

Community Improvement Districts in Kansas
In Kansas Community Improvement Districts, merchants charge additional sales tax for the benefit of the property owners, instead of the general public. Click here.

In Kansas, PEAK has a leak
A Kansas economic development incentive program is pitched as being self-funded, but is probably a drain on the state treasure nonetheless. Click here.

Government intervention may produce unwanted incentives
A Kansas economic development incentive program has the potential to alter hiring practices for reasons not related to applicants’ job qualifications. Click here.

City of Wichita
City of Wichita’s economic development page is here. The Sedgwick County/City of Wichita Economic Development Policy is here.

State of Kansas
A page at the Kansas Department of Commerce with incentive programs is here.

WichitaLiberty.TV: John Chisholm on entrepreneurship

In this episode of WichitaLiberty.TV: Author John Chisholm talks about entrepreneurship, regulation, economics, and education. View below, or click here to view at YouTube. Episode 119, broadcast May 8, 2016.

Shownotes

GDP by state and industry

An interactive visualization of gross domestic product by state and industry from the Bureau of Economic Analysis.

Composition of GDP by State, Kansas and U.S. Click for larger version.
Composition of GDP by State, Kansas and U.S. Click for larger version.
The Bureau of Economic Analysis is an agency of the United States Department of Commerce. BEA describes its role as “Along with the Census Bureau, BEA is part of the Department’s Economics and Statistics Administration. BEA produces economic accounts statistics that enable government and business decision-makers, researchers, and the American public to follow and understand the performance of the Nation’s economy. To do this, BEA collects source data, conducts research and analysis, develops and implements estimation methodologies, and disseminates statistics to the public.”

A relatively new series of data produced by BEA is gross domestic product (GDP) by state for 21 industry sectors on a quarterly basis. BEA defines GDP as “the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production.” It is the value of the final goods and services produced.

In describing this data, BEA says “These new data provide timely information on how specific industries contribute to accelerations, decelerations, and turning points in economic growth at the state level, including key information about the impact of differences in industry composition across states.” This data series starts in 2005.

I’ve gathered the data for this series for all states and present it in an interactive visualization using Tableau Public. I present the series in real dollars, meaning that BEA adjusted the numbers to account for changes in the price level, or inflation.

Click here to open the visualization.

Growth of gross domestic product of manufacturing for Kansas and the United States, illustrating volatility in Kansas. Click for larger.
Growth of gross domestic product of manufacturing for Kansas and the United States, illustrating volatility in Kansas. Click for larger.

Economic indicators in the states

During this century the Kansas economy has not kept up with the national economy and most neighboring states.

The Federal Reserve Bank of Philadelphia calculates two indexes that track and forecast economic activity in the states and the country as a whole.

Economic Indicators in the States ExampleThe coincident index is a measure of current and past economic activity for each state. This index includes four indicators: nonfarm payroll employment, the unemployment rate, average hours worked in manufacturing, and wage and salary disbursements deflated by the consumer price index (U.S. city average). July 1992 is given the value 100. 1

The leading index predicts the six-month growth rate of the state’s coincident index. In addition to the coincident index, “the models include other variables that lead the economy: state-level housing permits (1 to 4 units), state initial unemployment insurance claims, delivery times from the Institute for Supply Management (ISM) manufacturing survey, and the interest rate spread between the 10-year Treasury bond and the 3-month Treasury bill.” 2

Positive values mean the coincident index is expected to rise in the future six months, while negative values mean it is expected to fall.

I’ve created an interactive visualization of these two indexes. Examples appear nearby. Click here to open the visualization in a new window.

  1. Federal Reserve Bank of Philadelphia. State Coincident Indexes – a monthly coincident index for each of the 50 states. Philadelphiafed.org. Available at www.philadelphiafed.org/research-and-data/regional-economy/indexes/coincident.
  2. Federal Reserve Bank of Philadelphia. State Leading Indexes – current & future economic situation of 50 states with special coverage of Pennsylvania, New Jersey, & Delaware. Philadelphiafed.org. Available at www.philadelphiafed.org/research-and-data/regional-economy/indexes/leading.

Rich States, Poor States, 2106 edition

In Rich States, Poor States, Kansas continues with middle-of-the-pack performance, and fell sharply in the forward-looking forecast.

In the 2016 edition of Rich States, Poor States, Utah continues its streak at the top of Economic Outlook Ranking, meaning that the state is poised for growth and prosperity. Kansas continues with middle-of-the-pack performance rankings, and fell sharply in the forward-looking forecast.

Rich States, Poor States is produced by American Legislative Exchange Council. The authors are economist Dr. Arthur B. Laffer, Stephen Moore, who is Distinguished Visiting Fellow, Project for Economic Growth at The Heritage Foundation, and Jonathan Williams, who is vice president for the Center for State Fiscal Reform at ALEC.

Rich States, Poor States computes two measures for each state. The first is the Economic Performance Ranking, described as “a backward-looking measure based on a state’s performance on three important variables: State Gross Domestic Product, Absolute Domestic Migration, and Non-Farm Payroll Employment — all of which are highly influenced by state policy.” The process looks at the past ten years.

Looking forward, there is the Economic Outlook Ranking, “a forecast based on a state’s current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less — especially on income transfer programs, and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more.”

For economic performance, Kansas is twenty-seventh. That’s up from twenty-eighth last year.

In this year’s compilation for economic outlook, Kansas ranks twenty-seventh, down from eighteenth last year and fifteenth the year before. In 2008, the first year for this measure, Kansas was twenty-ninth.

Kansas compared to other states

Kansas and nearby states Economic Outlook Ranking. Click for larger version.
Kansas and nearby states Economic Outlook Ranking. Click for larger version.
A nearby chart shows the Economic Outlook Ranking for Kansas and some nearby states, shown as a trend over time since 2008. The peak of Kansas in 2013 is evident, as is the decline since then.

Why Kansas fell

Rich States Poor States Kansas trends 2016 aloneKansas fell in the Economic Outlook Ranking from 2013 to 2016. To investigate why, I gathered data for Kansas from 2008 to 2016. The nearby table shows the results for 2016 and the rank among the states, with the trend since 2008 shown. A rank of one is the best ranking, so for the trend lines, an upward slope means a decline in ranking, meaning the state is performing worse.

There are several areas that may account for the difference.

The most notable change is in the measure “Recently Legislated Tax Changes (per $1,000 of personal income)” Kansas fell four positions in rank. By this measure, Kansas added $2.67 in taxes per $1,000 of personal income, which ranked forty-seventh among the states. This is a large change in a negative direction, as Kansas had ranked seventh the year before.

In “Property Tax Burden (per $1,000 of personal income)” Kansas improved one position in the rankings, despite the tax burden rising.

In “Sales Tax Burden (per $1,000 of personal income)” Kansas fell one spot in rank. The burden is calculated proportional to personal income. The sales tax burden, as measured this way, fell slightly in Kansas, but the ranking fell in comparison to other states. (Although the Kansas sales tax rate rose in 2015, this report uses data from 2013, which is the most recent data available from the U.S. Census Bureau. It’s likely that the 2015 sales tax hike will increase this burden, but whether the ranking changes depends on actions in other states.)

Kansas improved six rank positions for “Debt Service as a Share of Tax Revenue.”

Kansas remains one of the states with the most public employees, with 672 full-time equivalent employees per 10,000 population. This ranks forty-eighth among the states.

Kansas has no tax and spending limits, which is a disadvantage compared to other states. These limitations could be in the form of an expenditure limit, laws requiring voter approval of tax increases, or supermajority requirements in the legislature to pass tax increases.

How valuable is the ranking?

Correlation of ALEC-Laffer state policy ranks and state economic performance
Correlation of ALEC-Laffer state policy ranks and state economic performance
After the 2012 rankings were computed, ALEC looked retrospectively at rankings compared to actual performance. The nearby chart shows the correlation of ALEC-Laffer state policy ranks and state economic performance. In its discussion, ALEC concluded:

There is a distinctly positive relationship between the Rich States, Poor States’ economic outlook rankings and current and subsequent state economic health.

The formal correlation is not perfect (i.e., it is not equal to 100 percent) because there are other factors that affect a state’s economic prospects. All economists would concede this obvious point. However, the ALEC-Laffer rankings alone have a 25 to 40 percent correlation with state performance rankings. This is a very high percentage for a single variable considering the multiplicity of idiosyncratic factors that affect growth in each state — resource endowments, access to transportation, ports and other marketplaces, etc.

Rich States, Poor States compilation for Kansas. Click for larger version.
Rich States, Poor States compilation for Kansas. Click for larger version.

Opinion: GOP economics devastated Kansas

An op-ed on the Kansas economy needs context and correction.

An op-ed about the Kansas economy needs a few corrections before the people of Illinois get a wrong impression of Kansas. The article is Opinion: GOP economics devastated Kansas, published in the Alton (Illinois) Telegraph. The author is John J. Dunphy.

First, Dunphy refers to Sam Brownback as the “Tea Party” governor of Kansas. As far as I know, the tea party favors reducing not only taxation, but spending too. Given the choice, Brownback preferred raising taxes rather than cutting spending. Not very tea party-like.

Dunphy: “Moderate Republicans who voiced objections to such extremist politics were targeted by the Tea Party and voted out of office in 2012. With the legislature now dominated by True Believers, Brownback was able to pass the largest tax cut in Kansas history.” I’ll leave it to others to judge whether the legislators voted into office in 2012 classify as “True Believers.” (My opinion is that True Believers are scarce in the Kansas Legislature.) But I do know this: The tax cuts were passed during the 2012 legislative session, which ended months before the 2012 primary elections. There seems to be a timing issue here.

Dunphy: “With such drastically-reduced revenue, Kansas had to cut social services.” Except Kansas spending has continued to climb, although there have been a few cuts here and there.

Dunphy: “Rather than admit that slashing taxes created a disaster …” Tax cuts allow people to keep more of what is rightfully theirs. That is not a disaster. That is good.

Dunphy: “Trickle-down economics doesn’t work. Although most Republicans choose to ignore it, George H.W. Bush said as much while campaigning for the GOP presidential nomination in 1980.” Contrary to this assertion (made during a political campaign, and we know how much those are worth), the administration and policies of Ronald Reagan ushered in the The Great Moderation, a period of sustained economic growth.

Tax collections by the states

An interactive visualization of tax collections by state governments.

Each year the United States Census Bureau collects data from the states regarding tax collections in various categories. I present this data starting in 1993, in an interactive visualization.

The values are for tax collections by the state only, not local governmental entities like cities, counties, townships, improvement districts, cemetery districts, library districts, drainage districts, watershed districts, and school districts.

Of particular interest is the “State Total” tab. Here you can select a number of states and compare their tax burdens. (Probably three or four states at a time is the practical limit.)

Data is as collected from the United States Census Bureau, Annual Survey of State Government Tax Collections, and not adjusted for inflation. Visualization created using Tableau Public. Click here to access the visualization.

Using the visualization. Click for larger.
Using the visualization. Click for larger.

Sales tax revenue and the Kansas highway fund

The effect of a proposed bill to end transfer of Kansas sales tax revenue to the highway fund is distorted by promoters of taxation and spending.

The bill is SB 463. The bill’s fiscal note tells how this bill, if passed, would affect the highway fund: “Beginning in FY 2018, the percentage of state sales tax and compensating use tax distributed to the [State Highway Fund] would be eliminated.” The fiscal note goes on to estimate that the highway fund would receive $553.4 million less sales tax revenue than it would otherwise in fiscal year 2018. (This bill proposed changes to other funds, but here I consider only highways.)

In an email to supporters, Economic Lifelines wrote: “SB 463 would redirect 35% of T-WORKS funding beginning in July of 2017. Passage of this legislation would be a devastating blow to the future of the T-WORKS program.” (Economics Lifelines is a group that lobbies for more spending on highways. Its members are primarily local chambers of commerce, labor unions, construction equipment dealers, and construction material suppliers. In other words, those who benefit from more highway spending, without regard to whether it is needed and wise.)

Former Kansas budget director Duane Goossen was more emphatic, writing: “Watch out! A very dangerous financial bill just surfaced in the Senate Ways and Means Committee, but it was promoted with language that hid the ultimate purpose and effect. Senate Bill 463 permanently transfers more than $500 million annually from the highway fund to the general fund.”1

Goossen has it backwards, however. The proposed bill would transfer nothing from the highway fund to the general fund. It would, however, stop transfers from the general fund to the highway fund.

There’s a difference, and it’s important. The highway fund has no claim on sales tax revenue other than what the legislature decides to send it. That amount has changed over the years. Kansas law specifies how much sales tax revenue is transferred to the highway fund. Here are some recent rates of transfer and dates they became effective:2

July 1, 2010: 11.427%
July 1, 2011: 11.26%
July 1, 2012: 11.233%
July 1, 2013: 17.073%
July 1, 2015: 16.226%
July 1, 2016 and thereafter: 16.154%

(If SB 463 passes as it stands now, on July 1, 2017 the rate would become 0 percent.)

Transfers from Sales Tax to KDOT. Click for larger.
Transfers from Sales Tax to KDOT. Click for larger.
Nearby is a chart showing how many sales tax dollars were transferred to the highway fund. In 2006 the transfer was $98,914 million, and by 2015 it had grown to $511,586 million, an increase of 417 percent. Inflation rose by 18 percent over the same period.3

(It’s important to note that in some years money has been transferred from the highway fund back to the general fund. Worse, in some years KDOT has borrowed money for the highway fund, but it was transferred to the general fund.4)

You’d think that Goossen, a former state budget director, would understand the difference between stopping a flow of funds versus reversing the flow. He claims the latter, and it isn’t surprising to see this mistake. A few sentences in the article let us know Goossen’s ideology, which is that Kansans should be taxed more so that government can continue to spend: “This maneuver does not fix the problem caused by unaffordable income tax cuts, it just makes highways and children pay for it.” First, tax cuts are never unaffordable. It is government that is unaffordable. Tax cuts let people keep more of what is rightly theirs. That is, unless you believe that government has a legitimate claim to your income and assets, as Goossen does. Second, he complains that “recurring revenue does not begin to cover expenses.” That is true. But the proper remedy is to reform and cut spending. Goossen prefers raising taxes.

Economic Lifelines makes the same mistake. We can understand — but not condone — this organization’s motive. It exists for the sole purpose of drumming up support for spending that benefits its members. If its director, who wrote the email cited above, said that Kansas is spending enough or too much on highways, he undoubtedly would be fired.

But what is Duane Goossen’s motivation for twisting the meaning of a bill? That’s a mystery.

KDOT spending on major road programs. Click for larger version.
KDOT spending on major road programs. Click for larger version.
To top it off, spending on highways has increased — notwithstanding the transfers from the highway fund — when we look at actual spending on roads. KDOT’s Comprehensive Annual Financial Report shows spending in the categories “Preservation” and “Expansion and Enhancement” has grown rapidly over the past five years. Spending in the category “Maintenance” has been level, while spending on “Modernization” has declined. For these four categories — which represent the major share of KDOT spending on roads — spending in fiscal 2015 totaled $932,666 million, up from a low of $698,770 in fiscal 2010.

  1. Goossen: High Danger Alert: SB 463. Kansas Center for Economic Growth. Available at: http://realprosperityks.com/goossen-high-danger-alert-sb-463/.
  2. Kansas Statutes Annotated 79-3620.
  3. Bureau of Labor Statistics CPI Inflation Calculator. Available at http://www.bls.gov/data/inflation_calculator.htm.
  4. Voice for Liberty, Kansas transportation bonds economics worse than told. Available at http://wichitaliberty.org/kansas-government/kansas-transportation-bonds-economics-worse-than-told/.

Spending in the states, per capita

An interactive visualization of per-capita spending in the states, by fund.

Is your state a big spender? Or is it frugal with your tax money? To see how your state compares with others in spending, use the interactive visualization below. The figures presented are per-person, and not adjusted for inflation.

The example appearing below shows general fund spending for Kansas and some surrounding states.

The visualization contains several views that present the data in different ways. Click here to open the visualization in a new window. Data is from National Association of State Budget Officers and U.S. Bureau of Economic Analysis (BEA); visualization created by myself using Tableau Public.

General fund spending per capita in Kansas and surrounding states. Click for larger.
General fund spending per capita in Kansas and surrounding states. Click for larger.

Should the U.S. implement austerity measures?

From Michael Smith, Chair of Department of Social Sciences at Emporia State University: “Video is now available for the debated hosted by Murad Gündüz Jalilov on behalf of Up to Us and the Public Administration Club: Should the U.S. implement austerity measures due to the size of the national debt? Featuring Dr. Max Skidmore of UMKC and Mr. Bob Weeks of wichitaliberty.org.”

View below, or click here to view at YouTube. The video was recorded in a challenging acoustical environment. An audio recording that I captured and processed for clarity is available at Debate: The National Debt.

Brookings Metro Monitor and Wichita

A research project by The Brookings Institution illustrates the poor performance of the Wichita-area economy.

Metro Monitor from The Brookings Institution rates metropolitan areas on a number of indicators.

Brookings Metro Monitor, Wichita, Map 2016-02On the map of metropolitan areas, blue means faster growth, and orange means slowest. You can see that Wichita has the economic growth of a typical rust belt city. (Click charts for larger versions.)

Brookings Metro Monitor, Wichita, Indicators 2016-02The table showing changes in indicators over the past decade shows Wichita almost always below the middle.

Brookings Metro Monitor, Wichita, Trends 2016-02The charts of trends over time shows Wichita falling behind the nation, then catching up in 2007 and 2008, but falling behind since then. As time goes on, the gap between the nation and Wichita widens, not narrows.

These unfortunate facts about the Wichita economy are old news, if we’ve been paying attention. See, for example Employment by metropolitan area, Wichita’s growth in gross domestic product, and Wichita per capita income not moving in a good direction.

The response of Wichita political, bureaucratic, and civic leaders is, by any measure, new paint on an old barn, or just keeping pace with other cities. The Greater Wichita Partnership is just a new name for the same old collection of institutions and people who have been responsible for the dismal performance shown in Brooking’s Metro Monitor. In fact, if you visit greaterwichitapartnership.org and click on “Economic Development” you’re taken to the same old page for Greater Wichita Economic Development Coalition, although with a new logo. Same old barn; new paint.

While we have to hope that the Wichita State University Innovation Campus works as advertised, we also must realize that dozens and dozens of major and minor universities across the country already have similar initiatives up and running.

WichitaLiberty.TV: Heritage Foundation’s Bryan Riley on free trade

In this episode of WichitaLiberty.TV: Foreign trade is an important issue in this year’s presidential campaign. Heritage Foundation economist and Senior Policy Analyst Bryan Riley explains concepts that voters can use in making an informed decision. View below, or click here to view at YouTube. Episode 111, broadcast February 28, 2016.

Shownotes

Steve Rose and Jim Denning on the Kansas economy

Kansas City Star editorialist Steve Rose visits with Kansas State Senator Jim Denning.

It’s helpful for Kansans to have commentary and factual injection accompany a Steve Rose editorial in the Kansas City Star. In this case let’s look at a column based on his interview with Kansas State Senator Jim Denning.

Steve Rose: “The numbers can be sliced and diced to make a positive or negative picture, but it is undeniable that Kansas government itself is virtually bankrupt, and Brownback’s tax policies are responsible.”

A government can balance a budget by taxing more or spending less. We see the clear preference of Rose here: There is not enough taxation. We now have an efficiency study that shows some ways to save money. The question is why didn’t the legislature commission this study in 2012, the year in which it cut taxes?

“[State Sen. Jim Denning of Overland Park] Denning said: ‘The governor rolled the dice on the most aggressive tax cut policy in history, and things just did not turn out the way he expected.'”

It’s a shame to see Republicans — or anyone, for that matter — referring to tax cuts as “rolling the dice.” Cutting taxes simply means that people are allowed to keep more of what is rightfully theirs in the first place — which is a good thing. There is legitimate concern that the 2012 tax cuts were distributed in an unfair or unwise way. The way to fix that is to cut taxes for those who didn’t receive the purportedly unfair cuts.

Unemployment with and without stimulus through 2014-01As far as the results of the tax cuts, the governor should not have bragged as he did. The ability of government to manage the economy is limited, especially at the state level. Consider the Obama stimulus. The nation’s unemployment rate was always above the rate the administration predicted if there were no stimulus. See Brownback and Obama stimulus plans.

Kansas Spending, Per Capita, Adjusted for CPI 2016-01Further, what is the role of taxation in Kansas? Is it taxation or government spending that is purportedly good for the Kansas economy? Is it to support spending? If so, the tax cuts have not have an effect on spending. While some programs have been trimmed, overall state spending continues on a largely upward trend (for all funds spending) or remains mostly flat (for general fund spending). See Spending and taxing in Kansas.

Denning: “If we would have closed the [LLC] loophole, we would have brought in an additional $200 million, and the governor would have been a hero.”

Kansas General Fund spending, showing large deficits of revenue compared to spending in 2014 and 2015.
Kansas General Fund spending, showing large deficits of revenue compared to spending in 2014 and 2015.
The LLC loophole Denning refers to is the zero income tax on pass-through business income. Eliminating it and recapturing the $200 million would not have balanced the Kansas budget. In fiscal years 2014 and 2015 the state spent $340 million and $308 million more than it took in as revenue. Spending restraint is necessary.

Denning: “The Legislature has controlled spending to the lowest levels on record. … Our constituents wanted us to reduce spending, and we did.”

It’s hard to justify Denning’s claim with facts. See again Spending and taxing in Kansas.

Brownback and Obama stimulus plans

There are useful lessons we can learn from the criticism of Kansas Governor Sam Brownback, including how easy it is to ignore inconvenient lessons of history.

It’s been three years since the tax cuts in Kansas took effect; tax cuts said by Governor Brownback to be a “shot in the arm” for the Kansas economy. Opponents of the governor and the tax cuts take great delight in reporting the generally anemic growth of the Kansas economy since then. Month after month, the tax cuts are condemned by Kansas newspaper editorial writers and the governor’s detractors.

I don’t think it’s a particularly strong form of argument to defend someone by showing how someone else is equally as bad — or worse. Similarly, criticizing someone for their fixation on A while they ignore the equally bad B: We need to know why they ignore B. Have they forgotten B? Do they not have time to write about B? Or do they ignore B because the fact of B is inconvenient to their ideology or their criticism of A? But I see that not everyone shares these ideals, and even so, perhaps we can learn something.

Many people remember that President Barack Obama promised that the unemployment rate would not top eight percent if the stimulus was passed. In January 2009 two Obama administration officials, including Christina Romer (who would become chair of the Council of Economic Advisers) wrote a paper estimating what the national unemployment rate would be with, and without, the American Recovery and Reinvestment Plan, commonly known as the stimulus. That plan passed.

The Romer paper included a graph of projected unemployment rates. The nearby chart from e21 took the Romer chart and added
actual unemployment rates. (The accompanying article is Revisiting unemployment projections. That chart and article were created in 2011. I’ve updated the chart to show the actual unemployment rate since then, as black dots. The data shows that the actual unemployment rate was above the Obama administration projections — with or without the stimulus plan — for the entire period of projections.

The purpose of this is not to defend Brownback by showing how Obama is even worse. (Disclosure: Although I am a Republican, I didn’t vote for Brownback for governor.) Instead, we ought to take away two lessons: First, let’s learn to place an appropriately low value on the promises and boasts made by politicians. Then, let’s recognize the weak power government has to manage the economy for positive effect. Indeed, the lesson of the Obama stimulus is that it made the unemployment rate worse than if there had been no stimulus — at least according to the administration projections.

And, there is one more lesson to learn about our state’s newspaper reporters and editorial writers, but I think you’ve discovered that already.

Unemployment with and without stimulus through 2014-01

Kansas, a rural state?

How does the population in Kansas compare to the nation and other states?

One of the most-often repeated themes in Kansas is that we are a rural state. Therefore, comparisons of Kansas to other states must be tempered and adjusted by this. It seems to be common knowledge.

Rural populations of the states. Click for larger version.
Rural populations of the states. Click for larger version.
There may be several ways to measure the “ruralness” of a state. One way is the percent of the state’s people that live in rural areas. The U.S. Census Bureau has these statistics. In the chart made from these statistics, Kansas is right in the middle of the states. 25.80 percent of Kansans live in rural areas.

That’s not too far from the country as a whole. For the entire United States, 80.7 percent of the population lives in an urban setting, according to the 2010 census. For Kansas, the figure is 74.2 percent.

Over time, Kansas is becoming more of an urban state, just as are most states and the country as a whole.

Do these numbers mean anything? It’s common for Kansas politicians to emphasize — even exaggerate — whatever connections they may have to a family farm. It’s part of a nostalgic and romanticized view of Kansas, the Kansas of Home on the Range. We are the “Wheat State” and “Breadbasket of the World,” and “One Kansas farmer feeds 128 people (plus you).”

So while Kansas is in the middle in the ranking of percent of population living in rural areas, our state’s politicians continue to play the “rural card.”

Voters and policymakers should keep this in mind, although politicians may not.

Click here to view and use an interactive visualization of states and urban population.

Percent urban population by state, with Kansas emphasized. Click for larger.
Percent urban population by state, with Kansas emphasized. Click for larger.

Employment by state and industry

An interactive visualization of employment in the states.

I’ve gathered employment data from the Bureau of Economic Analysis is an agency of the United States Department of Commerce, for the states and present it in an interactive visualization using Tableau Public. In the visualization you may use several different presentations of the data and filter for specific industries. The series are presented as the percentage change since the first values, so that relative growth, rather than magnitude, of employment is shown.

Growth in private nonfarm employment, Kansas emphasized. Click for larger.
Growth in private nonfarm employment, Kansas emphasized. Click for larger.
The nearby example from the visualization shows growth in private nonfarm employment, with Kansas emphasized against the other states.

Click here to access the visualization.

Employment by metropolitan area

An interactive visualization of employment in metropolitan areas.

Growth in Employment by MSA. Wichita is the bottom line.
Growth in Employment by MSA. Wichita is the bottom line. Click for larger version.
I’ve gathered employment data from the Bureau of Economic Analysis is an agency of the United States Department of Commerce, for all available metropolitan areas and present it in an interactive visualization using Tableau Public. In the visualization you may use several different presentations of the data and filter for specific areas and industries. The series are presented as the percentage change since the first values, so that relative growth, rather than magnitude, of employment is shown.

In the nearby example we can see that Wichita –- the bottom line — has performed poorly compared to some peers of interest.

Click here to access the visualization.

GDP by state and industry

An interactive visualization of a new data series from the Bureau of Economic Analysis.

The Bureau of Economic Analysis is an agency of the United States Department of Commerce. BEA describes its role as “Along with the Census Bureau, BEA is part of the Department’s Economics and Statistics Administration. BEA produces economic accounts statistics that enable government and business decision-makers, researchers, and the American public to follow and understand the performance of the Nation’s economy. To do this, BEA collects source data, conducts research and analysis, develops and implements estimation methodologies, and disseminates statistics to the public.”

This week BEA issued a release of a new series of data: gross domestic product (GDP) by state for 21 industry sectors on a quarterly basis. BEA defines GDP as “the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production.” It is the value of the final goods and services produced.

In describing this data, BEA says “These new data provide timely information on how specific industries contribute to accelerations, decelerations, and turning points in economic growth at the state level, including key information about the impact of differences in industry composition across states.” This data series starts in 2005. The announcement of the release of this data from BEA is here.

I’ve gathered the data for this series for all states and present it in an interactive visualization using Tableau Public. I present the series in real dollars, meaning that BEA adjusted the numbers to account for changes in the price level, or inflation.

In the visualization you may use several different presentations of the data and filter for specific states or industries. The series are presented as percentage change over time since the first values, so that growth, rather than magnitude, of GDP is shown.

Click here to open the visualization.

Using the visualization. Click for larger version.
Using the visualization. Click for larger version.

Kansas school reform

A Wichita economist and attorney offers advice to a committee of the Kansas Legislature on reforming Kansas schools for student achievement.

This week saw the third meeting of the 2015 Special Committee on K-12 Student Success for the Kansas Legislature. Of special interest was the short testimony of Robert Litan, a Wichita economist and attorney. His testimony summarized some of the important problems with Kansas public schools and points to ways that Kansas can move forward in providing education to schoolchildren. His written testimony may be viewed here.

In arguing for starting with a “clean sheet” instead of merely tweaking the current formula, Litan wrote: “The reason is quite simple. Despite continued increases in real spending per pupil in the state, educational outcomes in Kansas are not improving nor are the gaps between the performance of students from low-income families and all other students.”

He also touches on several ways that Kansas schools could improve efficiency in their operations without consolidating school districts. The savings could be several hundred million dollars per year, a significant sum in Kansas.

Kansas needs to improve the performance of schools, focusing particularly on closing the achievement gap between students from low-income families and others, said Litan. A possible problem, he writes, is that the additional money allocated for “at-risk” students may not be spent in ways specifically targeted to those students. A problem is lack of tracking systems to see how this money is spent. (The at-risk weighting is substantial. For its first few years, starting in 1992, the weighting added five percent to state funding for each student classified as “at-risk.” It rose over the years, reaching 45.6 percent in 2008.)

Litan also touches on the importance of having good teachers and the controversies surrounding how to evaluate teachers. But it is important to reward good teachers, he writes.

Cost savings might also be used to reward school districts that provide more student attendance time: “Other things being equal, more schooling time should enhance student performance.” Of note, this year’s agreement with the teachers union for the Wichita school district reduces the school year by two days.

Finally, the importance of school choice, which is nearly non-existent in Kansas. A new funding formula needs to allow for school choice:

Finally, there are limits to how much any change in the way funding for schools is allocated among districts can affect student performance. That is because today parents’ and students’ ability to choose their public education provider is very limited, or non-existent.

That is not true in some other states, where parents and their children have more choices, as they do in other spheres of life for other goods and services. While broader choice is not directly on the table of today’s hearing, hopefully any changes this Committee and the Legislature may make in funding will not penalize any new schools that may be formed in the wake of any possible future change in Kansas law governing charter schools.