Category Archives: Economy

Kansas gaining jobs from Obamacare

Despite its continued resistance to anything associated with Obamacare, Kansas is set to benefit from it. Up to 9,000 jobs are expected to be created at Medicare call centers in six states, including one in Lawrence. The call centers will answer inquiries related to the federally run insurance marketplaces. Kansas will get an even bigger economic boost if it allows the federal expansion of Medicaid. A study by the Kansas Hospital Association concluded that the expansion would inject more than $3 billion into the state’s economy and create 4,000 jobs over the next seven years.

Update regulations, revitalize general aviation

Good for Rep. Mike Pompeo, R-Wichita, for trying to lower costs and increase innovation in the general aviation industry. Pompeo and four other lawmakers have introduced the Light Aircraft Revitalization Act, which would implement regulatory changes recommended by a Federal Aviation Administration committee of aviation authorities and industry representatives. Congress needs to review these recommendations to make sure they wouldn’t compromise safety. But Pompeo contends that the slow and burdensome certification process keeps products out of the market that could actually improve safety.

Moran right about Internet sales tax.

Sen. Pat Roberts, R-Kan., was one of only 27 senators to vote Monday against the Internet sales tax bill. Sen. Jerry Moran, R-Kan, missed the vote because of speaking commitment but supports the measure. As Moran noted earlier, the bill is about leveling the playing field between online retailers and brick-and-mortar vendors. States also lost $23 billion in sales tax collections last year on out-of-state Internet, catalog and mail order sales, according to a study by the National Conference of State Legislatures. The bill faces tougher odds in the House, where many lawmakers are afraid to vote for anything that might be considered a tax increase. But as Moran has said, “The legislation will not impose a new tax on the Internet or anyone. It will, however, protect small businesses and empower states with the ability to control fiscal policy as they see fit.” The Kansas House delegation should back

So much for KBA being independent, free from politics

The Kansas Bioscience Authority was set up with a separate governing board in an attempt to minimize political influence on funding decisions. But those walls have been crumbling in recent years. Wichita lawmakers intervened to get funding for a local project, and now Gov. Sam Brownback wants to use KBA’s funding to help pay for an adult stem cell research center. The Midwest Stem Cell Therapy Center was an idea hatched this year by some state senators and will be part of the University of Kansas Medical Center. KU never asked for the center, and the project’s medical and commercial merit was never vetted. As part of the spending adjustments that he released this week, Brownback proposed diverting almost $1.2 million from KBA next year to create the center and about $750,000 annually to help pay for its operation.

Rich are getting a lot richer

Another report documents how the rich are getting richer while most everyone else is treading water or sinking. According to a new study by the Pew Research Center, the upper 7 percent of American households saw their average net worth increase 28 percent from 2009 to 2011, while the wealth of the other 93 percent declined by an average of 4 percent. “The changes mean that the wealth gap separating the top 7 percent and everyone else increased from 18-to-1 to 24-to-1 between 2009 and 2011,” the Washington Post reported.

Pro-con: Does U.S. need increased tax revenue?

America’s economy is poised to roar ahead if only Washington would stop holding it back. Ever since the Great Recession officially ended, the private sector has been adding jobs. What’s kept the economy in low gear and the unemployment rate stubbornly high has been the shrinking of government workforces: cops, teachers and other valuable public employees let go in the face of inadequate tax revenue. What fiscal policy should Washington adopt to boost our economy rather than drag it down? The first thing is to acknowledge that our current debt-reduction efforts can’t be primarily focused on spending reductions. We can’t cut our way out of debt, especially if we want to support our economy at the same time. We need a balanced approach of thoughtful spending curbs and increased revenue. If we don’t want to go deeper in debt, we need sufficient tax revenue from those best able to supply it to support job-creating federal investment in our still-struggling economy. – William Rice, Americans for Democratic Action

Even though economic growth is what we badly need to hasten our recovery, many of our leaders in Washington are hungry for even more tax revenue. Some still champion a big-government agenda that requires greater resources to implement more programs. But a heavy tax burden means consumers have less of their income to spend in the economy and businesses have less for hiring, expansion and investment. So when taxes go up, the rate of economic growth goes down. In order to keep our economy humming and put the government back on sound fiscal footing, we must undertake comprehensive tax reform and exercise real spending restraint through fundamental entitlement reform. Comprehensive tax reform should broaden the tax base so more people are paying into the system and simplify compliance for all business entities. It is the responsibility of the business community to keep the pressure on. Let’s remind Congress and the administration that, when families and employers fall on hard financial times, they must make tough decisions. It’s time for Washington to follow suit. – Martin A. Regalia, U.S. Chamber of Commerce

It makes sense for REAP to oversee airfare program

Good for Kansas House budget negotiators for reinstating $5 million in state aid to bolster air service in Wichita and Garden City. The Kansas Affordable Airfares Program is key to economic development. But it’s strange that some lawmakers now want the funding to go directly to Sedgwick and Finney counties’ governments rather than through the Regional Economic Area Partnership of south-central Kansas, which has managed the program for years at the state’s request. It makes sense for REAP to oversee the funding, as the airports serve many counties. Was this move prompted by REAP’s support of sustainable planning, which some people think is a U.N. plot?

Good news on jobs

Maybe the economy really is improving. The Dow has returned to record highs, and official unemployment is now at a four-year low. Unemployment dropped to 7.7 percent, according to a Labor Department report released Friday. Also, the number of jobs in February increased by 236,000 from January. It will be interesting to see what impact the sequester has on jobs and unemployment.

Are zero-tolerance policies going too far?

The recent suspensions of young kids as a result of school districts’ zero-tolerance polices on weapons are renewing debate about whether these policies go too far. Among the examples cited in an Associated Press article was a kindergartner who was suspended after telling her friends she was going to shoot them with a Hello Kitty soap-bubble gun. While everyone agrees that schools need to be watchful, the mother of the bubble-gun girl complained that they are treating little kids like “mini-adults, making them grow up too fast, and robbing them of their imaginations.”

WATC proving value of its degrees

The Wichita Area Technical College is demonstrating the impressive value of its degrees among employers, even in a lackluster economy. WATC’s survey of 90 percent of its fall graduates revealed that 97 percent of them had found jobs already, mostly in the area. Meanwhile, spring enrollment is 19 percent higher than last spring, just as last fall saw a 25 percent increase over fall 2011. Much of the momentum can be linked to WATC’s strengthened partnership with USD 259, and to the state funding made available by the career and technical education initiative promoted by Gov. Sam Brownback. But credit also is due WATC president Tony Kinkel and the elected officials at all levels, led by Sedgwick County commissioners, who pressed ahead with the funding and construction of the National Center for Aviation Training, one of WATC’s three campuses. Because they didn’t let the downturn cloud their foresight about workforce needs, Wichita-area employers are able to look to WATC for the workers they need now.

From Wichita Falls to Wichita

Congratulations to Tim Chase on his new job as president of the Greater Wichita Economic Development Coalition. Chase comes to Wichita after 12 years as president of the Wichita Falls (Texas) Chamber of Commerce and Industry, and with an impressive range of experience in economic development. It’s been nearly two years since the last permanent GWEDC president left – too long, especially amid such a deep downturn. Expectations are high for Chase’s ability to coordinate our community’s efforts to attract and retain businesses and to market itself not only as a hub for aviation manufacturing, research and training but as a fertile place for high-tech innovation and entrepreneurship.

Real national debt is more than five times larger

Former GOP congressmen Chris Cox and Bill Archer contend that the reason the U.S. hasn’t already reformed Medicare and Social Security is that most people don’t know the size of the unfunded liabilities of the entitlement programs. That’s because the U.S. Treasury isn’t required to include those liabilities in its “balance sheet.” If those liabilities were included, the nation’s debt wouldn’t total $16 trillion but nearly $87 trillion, or 550 percent of the gross domestic product. “When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually,” they wrote.

Income-tax cuts will reduce money available for bioscience

Among the little-discussed consequences of the state’s big tax-cut plan is how it will affect the Kansas Bioscience Authority, which gets the money it uses to fund bioscience initiatives from income-tax withholdings at bioscience companies. As they exempt the owners of 191,000 partnerships, sole proprietorships and other businesses from state income taxes, “the tax cuts will reduce the withholding available for bioscience,” confirmed the spokeswoman for Revenue Secretary Nick Jordan, who was an architect of the Kansas Economic Growth Act that created the authority while he served in the state Senate. But the authority has seen the state cap its annual funding over the past four or five years to about $35 million, and the tax bill “shouldn’t have any impact on” that amount of funding, Jordan’s spokeswoman said. Still, if Gov. Sam Brownback and his allies eventually succeed in eliminating the state income tax entirely, the funding stream and goals of the 2004 bioscience law will be undermined.

Pro-con: Is President Obama too hard on business?

Most businesses’ main interaction with government is paying taxes. Government doesn’t help them succeed but rather only erects barriers to overcome. The cost of government taxes and regulations are part of the overhead of a business. The greater the cost of the government overhead, the fewer people a business can hire. The major challenge for President Obama is to realize there is little he can do to help the average business in our country. We want to make a profit so that we can invest to grow our businesses or reward our employees and ourselves for successfully taking on the challenges and uncertainty of business. We also would welcome a little respect for the long hours we put in without any guarantees of reward. We would appreciate some common sense on regulation where absolutes can’t apply but cost-benefit analysis makes sense. – Peter Rush

The canard that President Obama is anti-business is a propaganda remnant from Mitt Romney’s failed presidential campaign. Obama, after all, was the president who bailed out Wall Street with the Troubled Asset Relief Program. TARP and other Obama corporate rescue programs, after all, benefited such goliath corporations as Bank of America, Citigroup, AIG, General Motors and Chrysler – saving tens of thousands of jobs. Obama’s American Recovery and Reinvestment Act, the economic stimulus package of 2009, provided direct and indirect assistance to small and large businesses through the hiring of construction firms and related firms to rebuild roads, highways, rail lines, airports and telecommunications infrastructure. Obama actually is saving American capitalism by reining in its excesses and plowing under its inequities. – Wayne Madsen

Kansas Chamber can be at odds with local concerns

The Kansas Chamber of Commerce’s new president, Mike O’Neal (in photo), said that the focus of his organization is on what benefits the state as a whole from a business perspective. “There may be times there’s a local issue that affects you that may not fit squarely with the legislative agenda at the state level,” he told members of the Garden City Area Chamber of Commerce last week. The Kansas Chamber’s push for tax cuts, regardless of the impact on schools and other important services, and the hundreds of thousands of dollars it spent trying to defeat local legislative candidates have caused a number of local chambers to pull out of the state organization. O’Neal also said that he does not believe there will be a state budget deficit, even though state revenue estimators recently forecast a $705 million drop in tax collections next fiscal year.

Southwest flights are great news for Wichita

It is great news – both for business and leisure travelers – that Southwest Airlines has committed to operating five daily flights from Wichita Mid-Continent Airport, starting June 2. The discount carrier will have two daily flights to Dallas, two to Chicago and one to Las Vegas. The only unfortunate news in the announcement Monday was that Wichita will lose its three daily AirTran Airways flights to Atlanta. But the Southwest flights to three major markets will more than make up for this loss.

End of Learjet strike a win for community

Congratulations to the leaders on both sides of the negotiating table at the Machinists union and Bombardier Learjet, whose efforts led to Saturday’s vote to approve the contract offer and Monday’s end of the five-week strike. The best feature of the new five-year contract is that it gets Learjet’s skilled workers back to the business of manufacturing outstanding aircraft that will be needed as the economy rebounds.

Listen to CEOs on reducing deficit

Republican members of Congress should listen to leaders of some of our country’s largest businesses on what’s needed to reduce the federal deficit. CEOs from more than 80 major U.S. companies – including Microsoft, AT&T, General Electric and Dow Chemical Co. – are urging Congress to raise taxes and cut spending, including entitlements. The group supports the proposal by the federal deficit-reduction commission that called for about $3 in spending cuts for every $1 in tax increases. But nearly every Republican member of Congress has pledged to never, ever raise taxes, no matter what. According to Grover Norquist’s group, Americans for Tax Reform, every member of Kansas’ congressional delegation except Rep. Kevin Yoder, R-Overland Park, has pledged to “oppose any and all efforts to increase the marginal income-tax rates for individuals and/or businesses.”

‘Fiscal cliff’ already costing jobs

Concern about the “fiscal cliff” already has wiped out nearly 1 million jobs this year, and if Congress fails to act it could result in nearly 6 million jobs lost through 2014, according to a new report by the National Association of Manufacturers. “Everyone is blaming everyone else as the country grinds to a halt,” one manufacturing company executive told the Washington Post. “I don’t think the political leadership in this country has an understanding of how long it could take to turn this boat around.”

Poverty rate highest among the youngest Kansans

“Poverty among children ages 4 and younger was higher than among other age groups,” according to the 2012 Kansas Economic Report by the Kansas Department of Labor. Kansans in the youngest age group had a poverty rate of 22.1 percent, while the poverty rate for Kansans of all ages is 13.5 percent. Shannon Cotsoradis, president of Kansas Action for Children, told the Topeka Capital-Journal that higher poverty among very young children is especially troubling because “we know that’s the most critical period for child brain development.”

Obama gets boost with new unemployment numbers

President Obama got some needed good news Friday after his flat and ineffective debate performance Wednesday. The U.S. jobless rate fell below 8 percent, declining from 8.1 to 7.8 percent. Republicans responded that 7.8 percent isn’t good enough. “This is not what a real recovery looks like,” Mitt Romney said in a statement.

Political rhetoric doesn’t match budget realities

Neither presidential candidate is being honest about the federal deficit and debt, columnist Robert Samuelson wrote. President Obama largely ignores the need for entitlement reform, instead implying that raising taxes on the rich will solve most of the problem. Though Mitt Romney is talking about the need to reform Medicare, his call for cutting taxes ignores the reality that the government can’t balance its budget through spending cuts alone. “What defines this campaign, in part,” Samuelson wrote, “is a yawning gap between the political rhetoric and the country’s budget problems.”

State revenue, unemployment news improving

It was encouraging that state tax collections in September were $28 million more than expected. The August receipts had come in $14.9 million less than anticipated, putting the state in a budget hole even before Gov. Sam Brownback’s tax cuts kick in. The unemployment rate is also improving slightly. The seasonally adjusted unemployment rate for August was 6.2 percent, down from 6.3 percent in July and 6.7 percent in August 2011. However, part of the unemployment improvement was due to a decline of about 5,000 people in the Kansas labor force (most of whom were older than 55).

Bair still speaking out about big banks, regulators

Kansas native Sheila Bair stood out during her five-year term as chairwoman of the Federal Deposit Insurance Corp. for her early warnings about high-risk lending and her willingness to take on the big banks. She is still speaking out in her new book, “Bull by the Horns,” which was released Tuesday. Bair, who grew up in Independence and graduated from the University of Kansas, blasts bankers she blames for the crisis and criticizes Treasury Secretary Timothy Geithner for being an apologist for Wall Street and opposing financial reforms, the New York Times reported.

Pro-con on Federal Reserve’s latest ‘monetary easing’

If the economy falters from here on out, it will be difficult to blame the Federal Reserve. Ben Bernanke, the Fed chairman, and all but one of the other members of the Fed policy committee, took decisive steps on Thursday to spur the economy, pledging to buy $85 billion worth of assets each month until the end of the year and to continue pumping money into the economy until the job market improves “substantially.” The open-ended nature of the plan and its linkage to jobs are welcome changes from previous interventions. Will the latest approach work? No one knows for sure because each new round of strong monetary easing is to some degree experimental. What is known is that fiscal policymakers – that is, Congress – have failed to step forward with stimulative policies, largely because Republicans have refused to even consider measures to hire teachers, rebuild schools and otherwise create jobs. The economy needs more help than the Fed can provide. But the Fed is to be applauded for doing what it can. – New York Times

Chairman Ben Bernanke and his music men at the Fed’s Open Market Committee put on their party hats Thursday and unleashed an unlimited program of monetary easing. The move exceeded even Wall Street’s expectations, but whether it will help the real economy in the long term is doubtful. This is the Fed’s third round of quantitative easing (QE3) since the 2008 panic, and the difference this time is that Ben is unbounded. The Fed said it will keep interest rates at near-zero “at least through mid-2015,” which is six months longer than its previous vow. The bigger news is that the Fed announced another round of asset purchases – only this time as far as the eye can see. Bernanke forswore any partisan motives on Thursday, and we’ll give him the benefit of the personal doubt. But by goosing stock prices, and thus lifting the short-term economic mood, the Fed has surely provided President Obama an in-kind re-election contribution. The irony is that, with this historic and open-ended easing, Bernanke is also tacitly admitting how lousy the Obama-Bernanke economy really is. – Wall Street Journal