By Brian R. Hook
December 18, 2009

(KansasReporter) TOPEKA, Kan. – New research points to a year of slowing economic decline across Kansas with employment projected to decrease by 0.5 percent in 2010.

The state is expected to lose approximately 6,450 jobs, according to a new economic forecast released on Friday by the Center for Economic Development and Business Research at Wichita State University.

The unemployment rate in Kansas rose more than 2 points to 6.4 percent during the last 12 months, ending October 2009, according to the report. Unemployment rose by 34,177 people.

There are signs of recovery on the horizon, the report noted. The number of people unemployed in Kansas declined by more than 23,000 from its peak in July to October.

Economic growth is projected to fall by 2.6 percent in 2010, including an expected decrease of 1.7 percent in the trade, transportation and utilities sectors, the report said. Service sectors, meanwhile, are expected to increase by 0.6 percent, or 3,355 jobs, while government employment is expected to increase 0.2 percent.

"The national rebound will be slow to infiltrate the state of Kansas' economy," the report said. "A slower pace of decline is reflected in the Kansas forecast for the remainder of 2009 with a sluggish rebound beginning in the second quarter of 2010."

A separate research report out on Thursday suggested that the rural economy in Kansas is starting to improve, but the report by an economist at Creighton University in Omaha, Neb., said that weakness continues to linger throughout an 11-state region.

The Kansas Rural Mainstreet Index expanded to 39.0 this month from 36.9 in November. The index in all 11 states rose to 40.9 in December from 38.4 in November. The index has remained below the growth neutral reading of 50 for 22 consecutive months.

Despite the improving conditions, lower incomes and less spending by taxpayers will have an impact on the state's revenue for fiscal 2010, according to the Consensus Revenue Estimating group. The group, consisting of the state's budget director and director of the Legislative Research Department, along with three state university economists, last month estimated a $235 million drop in state revenues for fiscal 2010, ending on June 30^th.

Kansas Gov. Mark Parkinson, soon afterwards, announced a fifth round of cuts for the fiscal 2010 state budget totaling $259 million. He has said that he does not want to make any further cuts and he told KansasReporter last week that he is considering tax increases, new taxes or reduced tax exemptions to raise revenue.

This is in contrast to what many legislators want and might turn out to be an area of contention in the upcoming legislative session set to start in January. Kansas Speaker of the House, Michael O'Neal, told KansasReporter last week that now is not the time to raise taxes or cut tax exemptions.