The word “jobs” has become the justification for any number of legislative proposals through the years. The word has been both an excuse and a reason for proposed legislation. Tax cuts here, tax credits there, tax reform somewhere else, shifting the burden to others, not having taxes at all. We’re going to hear it over and over again in the session beginning today. We have to cut taxes to remain competitive with other states. We have to eliminate this tax and shift that tax or jobs will fly across our borders into other states and Missouri will be left impoverished in one way or another. Both parties are willing to give away part of the farm to please or appease supporters and critics, especially supporters and critics during an election year in a state that runs elections as no-money-limits contests.
But does all of this gyrating about jobs and taxes really put Missouri in a more competitive position?
Of course it does, say those who claim Missouri jobs are going to Kansas in droves because Kansas has passed some big tax cuts. Of course it does NOT, say opponents of the efforts to seal our western border with Kansas, citing the need for better schools, better infrastructure, better health care, and other things that cannot be bought if Missouri gives away more of its tax base.
A study from Moody’s Analytics, an economic forecasting company recognized around the world, raises some questions about whether the stakes are as high as legislative interests on either side say they are.
Staff writer Pamela Prah with the Pew Charitable Trust’s “Stateline” program points out that Moody’s forecasts 2.6-million jobs will be created in this country this year, putting the unemployment rate below what it was before the recession hit in 2008, and more than recovering the number of jobs lost during that recession. More than one-fifth of those jobs are expected to be created in just two states, Texas and Calfiornia. Add in Florida and Arizona, and you have one-third of the jobs that will be created. That means there are 1.825 million jobs left for the other 46 states to create, an average of 39,674.
Prah writes, “Republicans likely will continue to press for tax cuts as a way to create jobs, while Democrats will try to boost job training and education programs and push for increases in the minimum wage.” She’s got Missouri down on that one.
But even if the Missouri legislature does nothing, says Moody’s, our state is forecast to generate 35,936 jobs this year. Missouri ranks 39th among the states in anticipted job growth.
How about Kansas, that place that many Missouri legislators want Missouri to be like? Moody’s ranks Kansas 36th in job growth percentage (1.35% vs. 1.33% for Missouri) and forecasts Kanss will add 18,508 jobs. So Kansas with a tax structure Missouri tax-cutters want to emulate, is forecast to grow its jobs by two-one-hundredths of a percentage point greater than Missouri and create about half as many jobs as Missouri is forecast to do.
Neighboring Tennessee, praised by tax-cutters for its low-tax policies, ranks 44th on the job-growth survey with a growth rate of only 1.23% in 2014 and is expected to add 33,863 jobs, six-thousand fewer than Missouri..
Kentucky is 22nd with a job growth rate of 1.63%, but the forecast is for Kentucky to create 30,011 jobs, five thousand less than Missouri is expected to gain. It all depends on what base the growth comes from.
All of these rankings are played out in a narrow playing field.
Missouri is expected to see a job growth rate of 1.33 percent this year. We are, as we mentioned, 39th. But Utah, the last state in the top ten for job growth, expects an increase of only 1.46%. New Mexico, which is the best state in the bottom ten, expects job growth of 1.25%.
If Missouri were to increase its growth rate by a mere 13-hundredths of one percent, it would join Utah as a top-ten state. Two-one-hundredths of a percent would equal Kansas’ expected growth.
Earlier today, a new ingredient might have been added to the discussion, particularly as it focuses on the so-called “border war” with Kansas.
(Why is it, by the way, that Kansas is the only state with which we have a “border war?” We compete with other neighboring states but that competition is not described with the same phrase that dates to Civil War days when there was not just a business rivalry but actual shooting and killing and burning. Some observers think the phrase is just part of today’s bumper-sticker politics where a semi-inflammatory phrase is substituted for reasonable discussion. Anyway….)
The Bureau of Labor Statistics’ latest report will show the Kansas City metro area had 13,400 more non-farm payroll workers in November, 2013 than in November of ’12. The Missouri side added 10,700 of those jobs. The Kansas side, where all of those Missouri jobs are fleeing to because of the much more favorable tax environment, had gained only 2,700 jobs.
We wonder whether, should an argument be made during legislative debate that Missouri must keep up with Kansas, somebody will ask whether two-one-hundredths of a percent is worth the cost to many state programs and services that have fallen during the recession and have not been able to get up. Maybe somebody will point to the BLS numbers and question whether Missouri should get all het-up about Kansas stealing jobs from Missouri.
The Missourinet has reporters in the House and in the Senate when this kind of issue comes up. We’ll be reporting on the bumper-sticker debate and the reasonable discussions alike during the legislative session that starts today.