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Kan. labor officials paint improving economy

John Milburn, Associated Press

TOPEKA, Kan. (AP) -- The impact of Kansas' recent income tax cut on the state's job market won't be known for three to five years, a state economist said Wednesday, but the overall economic outlook was improving.

The tax cuts were enacted in 2012 and took effect Jan. 1, lowering the individual income tax rates and eliminating taxes for nearly 200,000 certain businesses.

Inayat Noormohmad, chief labor economist for the Kansas Department of Labor, said it's typical to not immediately see how such policy changes affect the economy.

Noormohmad said Kansas was seeing improvement in job creation, personal income and gross state domestic product as it recovers from the recession.

"It will be interesting to see what the future holds," he said. "It is difficult to predict if this is the new normal for job growth."

His assessment was part of the annual "State of Labor" address by Kansas Department of Labor Secretary Lana Gordon. The speech, which included the release of the 2012 economic overview, is scheduled to coincide with the Labor Day observance.

Kansas has seen a slight increase in its unemployment rate recently, rising to 5.9 percent in July from 5.8 percent in June. Gordon and others have attributed it to more people entering the job market — including recent college graduates — and seeking employment as economic conditions improve.

The average unemployment rate in 2012 was 5.7 percent compared to 6.5 percent in 2011.

The state added 18,100 jobs in 2012, a 1.4 percent increase, the highest percentage increase in five years, Gordon said. It was also the first time since 2007 that growth was more than 1 percent.

Kansas has added 82,100 jobs since the lowest point of the recession in January 2010.

Noormohmad said Kansas isn't immune to global economic pressures, such as the Syrian conflict or the slowing of growth in China and India, which could blunt future activities.

However, state economist Tyler Tenbrink said the bigger pressure was the reduction of government spending at all levels. He said when governments eliminate jobs, it puts more pressure on the private sector to create more employment opportunities in order sustain growth.

"Budgets are going to be difficult to deal with going forward," Tenbrink said.