Tax Increases May Have Made Kansans Reluctant To Spend, Says Economist

One statistic lost in the overall narrative about Kansas fiscal situation is an important one, according to an economist with the Sandlian Center for Entrepreneurial Government at the Kansas Policy Institute.

“Kansans have been sending smoke signals about impending trouble for the last seven months,” said Michael Austin. “That’s in sales tax. The lack of consumer shopping that we’ve seen for more than half a year now tells me Kansans are probably pretty concerned about their financial future.”

The December number is particularly telling, as Kansans apparently had a little less Christmas in 2018.

“We’re not entirely sure what the reason is,” said Austin. “What we are sure about is, in the latest tax report, sales tax dropped by $9 million. If you reverse engineer that, it means holiday shopping in Kansas dropped a whopping $85 million.”

National sales numbers had serious growth in 2018.

“Something is happening in Kansas that is not happening to the country at large,” said Austin. “I actually think that the state fiscal policy may play a role here.”

Austin notes that Kansans have seen multiple tax increases in the past four years and Austin postulates that concern over the possibility of future increases may be part of what’s slowing spending now.