More About Michael Leachman

Michael Leachman

Michael Leachman joined the Center in July 2009. He is the Director of State Fiscal Research with the State Fiscal Project.

Full bio and recent public appearances | Research archive at CBPP.org


State and Local Jobs Fell in January

February 6, 2015 at 4:14 pm

While today’s jobs report shows that the economy added jobs at a healthy pace in January, job growth could have been even stronger if states and localities hadn’t cut 4,000 positions.

About a third of the lost jobs were for teachers and others working in K-12 schools, preliminary data suggest.  The rest were non-education jobs at the state level, a category that includes state police, public health employees, and child protective workers.

The January job losses further slowed the already very weak recovery for state and local government jobs.  Over the last six months, states and localities have added jobs at a pace that’s only one-eighth the pace of total job growth nationally.  Part of the problem is recent tax cuts in states like Kansas, North Carolina, Wisconsin, which make it harder for a state to maintain public services.

Despite a modest improvement since bottoming out in mid-2013, state and local government jobs are still down 635,000 from their August 2008 peak.  (See chart.)  Nationally, the number of jobs returned to pre-recession levels last spring, but states and localities have added back less than one-fifth of the jobs they cut after the recession took hold.

5 Pieces of Context for the New Kansas Budget

January 16, 2015 at 10:45 am

With Kansas Governor Sam Brownback releasing his budget this morning, it’s a good time for a refresher about what’s happened since Kansas enacted one of the largest state income tax cuts in history two years ago.

  1. Kansas’ finances are a mess. The tax cuts have proven even more expensive than originally imagined, leaving the state with far less revenue than it will need to pay for schools and other state services.  To get through the past two years, the governor has nearly drained Kansas’ operating reserves, leaving the state highly vulnerable to the next recession.
  2. Kansas’ schools and other services have been weakened and face even more cuts. General state aid for schools per student is 15 percent below pre-recession levels.  And with the state’s financial picture so bleak, more cuts are likely on the way, though a court ruling that the state’s school funding is so low it violates the state constitution may help.
  3. Taxes are down for the wealthy but up for the poor. Kansas’ tax cuts didn’t benefit everyone.  Most of the benefits went to high-income households.  Kansas even raised taxes for low-income families to offset part of the revenue loss; otherwise, the cuts to schools and other services would likely have been even bigger.
  4. The tax cuts haven’t boosted Kansas’ economy.  Since the tax cuts took effect two years ago, Kansas has seen private sector jobs grow by 2.6 percent, notably slower than the 4.4 percent growth nationally.
  5. There’s little evidence that the tax cuts will improve its economy in the future.  The latest official state revenue forecast, from last November, projects personal income will continue to grow more slowly in Kansas than in the nation as a whole this year, next year, and the year after that.  (See chart.)

State and Local Tax Systems Hit Lower-Income Families the Hardest

January 15, 2015 at 9:59 am

In nearly every state, low- and middle-income families pay a bigger share of their income in state and local taxes than wealthy families, a new report from the Institute on Taxation and Economic Policy (ITEP) finds.  As the New York Times’ Patricia Cohen wrote, “When it comes to the taxes closest to home, the less you earn, the harder you’re hit.”

Only California taxes the top 1 percent of households at a higher effective rate (8.7 percent) than middle-income taxpayers (8.2 percent), ITEP found.  In the ten states with the most regressive tax systems, the bottom 20 percent pay up to seven times as much of their income in taxes as their wealthy neighbors.

Washington State’s tax system is the most regressive, according to ITEP.  The bottom 20 percent of taxpayers pay 16.8 percent of their income in taxes, while the top 1 percent pay just 2.4 percent.  After Washington, the most regressive state and local tax systems are in Florida, Texas, South Dakota, Illinois, Pennsylvania, Tennessee, Ari­zona, Kansas, and Indiana.

A number of states, including Kansas, North Carolina, and Ohio, have made the situation worse in recent years by cutting income taxes, the only major state revenue source typically based on ability to pay.  Income tax cuts thus tend to push more of the cost of paying for schools and other public services to the middle class and poor — exactly the opposite of what is needed.

School Jobs Up in December But Still Far From Recovered

January 9, 2015 at 2:17 pm


Local school districts added 2,000 jobs for teachers, principals, and other employees in December, today’s jobs report shows, continuing schools’ painfully slow recovery from the recession.

Yet schools still have a long way to go before they leave the recession behind.  School districts nationally employ 268,000 fewer workers than in the fall of 2008, the first full school year after the recession started — even as the number of students has risen by about 485,000. (See chart.)

Strong schools are a crucial building block of a healthy economy, and states and localities should make the investments necessary to rebuild and strengthen them.  Last month’s modest gain is good news but far from what’s needed.

More Bad News for Backers of Kansas Tax Cuts

November 21, 2014 at 10:42 am

The latest projections from Kansas’ nonpartisan Legislative Research Department bring more bad news for those who hoped Kansas’ massive tax cuts would generate an economic surge.

The department predicts that personal incomes will grow more slowly in Kansas than in the nation as a whole this year and will continue to lag behind the national rate in 2015, 2016, and 2017, by wide margins (see graph).

This isn’t what tax cut proponents predicted.  Governor Sam Brownback said they would be “a shot of adrenaline into the heart of the Kansas economy.”  The Heritage Foundation’s Stephen Moore, who helped design them, said the economic benefits would be “near immediate and permanent.”

Faced with the state’s unimpressive economic performance since the tax cuts took effect, proponents now claim they just need a little more time to work.  But the new forecast, combined with last week’s announcement that Kansas’ budget has fallen much further into the red than previously acknowledged (because of the tax cuts), casts further doubt on those claims.

This shouldn’t be a surprise.  History suggests that deep cuts in personal income taxes are a poor strategy for economic growth, and the serious academic literature typically finds little relationship between a state’s tax levels and its economic performance.  So there’s no reason to think that the tax cuts will cause Kansas’ economy to boom in the future.