GOP members of tax panel wary of statistics on economic recovery after COVID-19


TOPEKA – The participation rate in Kansas has fully recovered from the rapid decline at the start of the COVID-19 pandemic and the number of people receiving unemployment benefits has fallen to its lowest level since the start of the crisis global health, state officials said.

The percentage of Kansas’ population working or actively seeking work was 67.2% in January 2020, dropped to 66.5% in June 2020, and soared to 67.5% in September.

Edward Penner, senior economist in the Kansas Department of Legislative Research, presented the numbers and a series of other economic indicators on Monday for a joint House and Senate committee examining options for adjusting the state’s tax policy.

“At this point,” Penner said, “all of these people are back in the workforce, and then some. This was one of those stories where Kansas was different from the nation. Kansas workers sort of returned to the workforce and returned to work at a rate that exceeded what domestic workers did. “

The number of people receiving unemployment insurance benefits in Kansas stood at 10,320 in October, the lowest number since the start of the COVID-19 pandemic.

At the same time, the state’s tax revenue exceeded estimates by $ 750 million in the fiscal year that ended in June. The updated revenue estimate for the current fiscal year has been increased by $ 1.3 billion, prompting Gov. Laura Kelly and a bipartisan contingent of lawmakers to push for the possibility of reducing the sales tax from 6.5% on state food.

GOP statistical rejection

Senator Mark Steffen, a Republican from Hutchinson, said he was curious whether there had been a marked improvement in labor market participation after the expiration of the strengthened federal unemployment benefits in early September. Many GOP lawmakers have pressured Kelly to end this congressional help before federal programs are scheduled to conclude, arguing that the extra help is causing people to delay their return to work. She refused to order cuts in unemployment assistance.

Penner said much of the workforce returned to the fold in the first five months of the pandemic. The disappearance of supplementary unemployment benefits has not significantly improved participation in the Kansas workforce, he said.

Rep. Adam Smith, the Weskan Republican and chairman of the House Taxation Committee, said he was convinced businesses were still suffering from labor shortages in northwest Kansas. He urged legislative staff to estimate unfilled jobs across the state of Kansas.

“I still see a lot of companies hiring,” he said.

From February to April 2020, Kansas lost 158,000 non-farm jobs as the economy crumbled amid the spread of the virus. The latest statistics showed that 73.5% of that crater of jobs had been filled in September. The remaining gap could be linked to people who took early retirement or workers uncomfortable taking a job with a shortage of childcare providers and uncertainty over the influence of COVID -19 on schools, Penner said.

Senator Tom Holland, a Democrat from Baldwin City, said he had heartburn over how businesses have responded to the economic disruption associated with the pandemic. He said it appeared some employers were focused on removing older staff at the higher end of the pay scale.

“My fear is that you have had companies that have laid off their more experienced workforce,” Holland said. “Basically they’re getting rid of those jobs.”

Representative Francis Awerkamp, ​​R-St. Marys, said legislative staff should balance statistical presentations to the legislature by including an assessment of the financial damage caused by the government’s pandemic guidelines.

“Can we also add an estimate of the economic impact of all government shutdowns, blockages, and mandates?” ” he said.

Preparation of the 2022 session

According to state economic forecasters, Kansas’ unemployment rate could reach 3.9% this year before falling to 3.5% in 2022 and 3.4% in 2023. The national unemployment rate is expected to be d ” approximately 5.5% for 2021, 3.8% in 2022 and 3.5% in 2023.

Senator Caryn Tyson, a Republican from Parker who chairs the regular Senate tax committee, said it was important for people to be careful when assessing unemployment statistics. She said that while she was working on a master’s degree in engineering management at the University of Kansas, it became apparent her work estimates were lacking in precision.

“The way they collect the numbers, the data for these unemployment numbers, is speculative and not always accurate,” said Tyson, a GOP candidate for state treasurer.

Work on fiscal, budget and coronavirus issues during the 2022 legislative session could take on a particularly partisan tone given the desire of Republicans and Democrats to influence Kelly’s reelection campaign for governor in November 2022.

Tyson said she would have preferred to move forward with significant tax reform during the 2021 legislative session, but was dismissed by House and Senate leaders who objected to the timing of her goal.

The two-day hearing scheduled for the Interim House and Senate Tax Committee are designed to prepare members of both chambers for a full adjustment to the state’s tax laws in the next session, she said. declared.

“We can move quickly,” she told the rest of the panel. “That’s the goal of the two-day meeting. To help you arm yourself and prepare us for the 2022 session. ”


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