Kansas Reaps What It Sows With Smart Reform Growing Into Abundant Unemployment Trust Fund and Stronger Workforce
Six years after tying jobless benefits to the economy, Kansas’s unemployment trust fund has grown 900% to nearly $1 billion, protecting the state’s safety net and cutting the business tax in half.
Naples, FL—Today, the Foundation for Government Accountability (FGA) released a new research paper tracking the results of six years’ worth of data after the Kansas Legislature enacted unemployment indexing in response to high state unemployment rate.
Unemployment indexing is designed to be responsive to economic conditions. Tying the duration of unemployment insurance (UI) benefits to a state’s unemployment rate is a proven reform to replenish the UI trust fund, stabilize it for future economic downturns, cut business taxes, and move people back into the workforce more quickly when jobs are plentiful.
“When leaders in Kansas faced workforce challenges, they responded with the right solution. Now after six years of data, it’s clear their reforms are working—they secured the UI trust fund, helped guide people back to work, and cut the business tax in half,” said Michael Greibrok, senior research fellow at the Foundation for Government Accountability. “After sowing the seeds of smart reform, Kansas is reaping the rewards.”
At the end of 2013, Kansas burdened its employers with an unemployment tax rate of 2.68 percent on taxable wages. This was the highest in the region at the time. But by the end of 2019, Kansas cut its unemployment tax rate to just 1.16 percent on taxable wages, a reduction of more than half.
“When employers see stability in government and the workforce, they have the confidence to lower prices, raise wages, or hire more workers. That’s what’s happening in Kansas,” said Greibrok. “The Sunflower State is on solid ground and set up for future success. Kansas has followed the lead of states like Alabama, Florida, and North Carolina, and other states should take note of this reform’s proven track record.”
The Foundation for Government Accountability (FGA) is a non-profit, multi-state think tank that promotes public policy solutions to create opportunities for every American to experience the American Dream. To learn more, visit TheFGA.org.