I have relatives that live in Georgia who want to move back to their home state of Kansas to retire, but are taken aback by the additional taxes they must pay for the privilege of living here. I have been providing them with data on the tax rates of different counties. They cannot justify the additional $200,000+ in taxes it would take to live here over the course of their retirement just to be closer to family.
The Tax Foundation, Inc. (www.taxfoundation.org) calculates state rankings by taking the taxes paid for all purposes across the state and dividing by the number of residents to come up with a statewide number; Federal taxes are excluded. They have been accumulating and reporting this data since 1937. They report that Kansas ranked 20th out of the 50 states at $5,185 per person, according to the latest data from 2018. Parsing the data between state and local taxes made no difference in our ranking.
Tax collections of $11,311 per capita in the District of Columbia surpass those in any state. The three states with the highest tax collections per capita are New York ($9,829), Connecticut ($8,494), and North Dakota ($7,611). The three states with the lowest tax collections per capita are Tennessee ($3,286), Alabama ($3,527), and South Carolina ($3,705).
Kansas ranks worst among all the surrounding states, except Nebraska, which ranks 17th and collects about $179 per person more than we do. The best ranked state is our area is Oklahoma at $3,850 per person, earning them a ranking of 45th; Missouri is not far behind at 41st.
The first comparison that potential new residents consider is the cost of property taxes on houses; I don’t have to tell you that we fail that comparison miserably. One can only conclude that the cost of government for all purposes inside our state boundaries is too high.
The good news for Kansas is that we are number two on the list of the Cost of Living Index, as compiled by the Council for Community & Economic Research; only Mississippi had a lower cost of living. Of our Midwest neighbors, Oklahoma is 4th and Missouri is 7th. For highly taxed Nebraska, the news is not as good, as they were ranked 19th of the 50 states.
If Kansas and Bourbon County want to promote economic development, we need to address this issue. If we can’t convince relatives who were born and raised here to come back for retirement, what chance do we have with those who have never lived here? Local governments must look at ways to cooperate across jurisdictional lines to share resources and save expenses. It is the only way I can see that will give us the opportunity to lower taxes while not making drastic cuts to services. It is imperative for us to take action unless we want to continue to divide the increasing cost of government services amongst a declining population base well into the future.