Small-business owners got a pep talk Tuesday from Kansas Gov. Sam Brownback, who delivered on a promise to exempt their profits from state income taxes starting next year.

"That's a shot of adrenaline to the heart of this economy," Brownback told a group assembled at Johnson County Community College. "That's where most Kansans work -- for small businesses."

Brownback and others repeated the arguments they made in the legislative debate that led to passage of most of the governor's tax overhaul.

The Legislature lowered the state's top income tax rate, raised the standard deduction that most Kansas taxpayers claim and gave tax-exempt status to the business income that individuals earn from proprietorships, partnerships and similar businesses.

Tuesday's Kansas Small Business Forum was designed to get the word out to business owners and potential entrepreneurs.

Economist Arthur Laffer, an adviser in the Reagan administration, touted his research showing economic benefits for states that have no state income tax when compared with states imposing the highest rates.

Laffer, who has been a paid adviser in Brownback's tax overhaul effort, said that several states had raised their taxes but that Kansas was among another group seeking economic gains by lowering taxes.

"Nowhere is that revolution more powerful than it is right here in Kansas," Laffer said.

Kansas' new lower rate undercuts the top income tax bracket in most of the surrounding states, and Brownback said he would continue to improve that economic advantage.

Laffer sought to answer some critics' complaints that taxes are only one factor in the economic health of any state. He acknowledged the influence of Florida's beaches, Nevada's casinos and Alaska's oil -- three faster-growing states with no state income taxes.

"That doesn't mean taxes don't also matter," Laffer said.

And, he said, states that have adopted income taxes where none had existed saw slower economic growth.

Brownback hopes to get the biggest economic boost from the tax exemption for small businesses.

"The big item in this bill is the exemption of nonwage business income from Kansas taxation," said Gary Allerheiligan, former president of the Kansas Society of CPAs, who laid out details of the business tax changes for the audience.

The exemption doesn't reach traditional corporations, which tend to be larger companies. It applies to those structured as pass-through businesses such as a limited liability company or LLC, which tend to be smaller companies.

Allerheiligan noted that traditional corporations that own LLCs would still owe state taxes on the LLCs' business income. None of the changes affect federal tax bills.

Kansas residents who own LLCs and the other kinds of pass-through businesses won't owe the state tax on their business income those businesses produce.

Kansas Secretary of Revenue Nick Jordan called the state's exemption "a national example on tax policy."

The exemption should not only attract businesses to Kansas but also make it easier for new businesses and young businesses in the state to grow and hire more workers, Jordan said. He said the tax exemption would allow owners to keep more of the profits inside the businesses as capital to fund expansion.

Poor access to capital is one of many impediments to business growth, said Thom Ruhe of the Kauffman Foundation, who spoke at the forum. Much of the foundation's research focuses on business start-ups and their effects on jobs.

This time, however, Ruhe was citing an Inc. magazine survey of fast-growing businesses. It showed that taxes were far less a problem than ability to find qualified employees and the difficulties of managing fast growth.

But access to capital wasn't far behind, and Ruhe noted that Midwestern states such as Kansas had fewer in-state investors looking for business ventures to back, forcing owners to find backers on the coasts.

One consequence, he said, is that new businesses in Kansas weren't growing as quickly as their counterparts nationally.

An audience member asked Brownback about the state's education and transportation funding, "because you're talking about cutting our spending."

He said that schools and roads more than taxes were on the minds of potential employees he was trying to attract from out of state.

The governor said his focus had been on not only controlling spending but also spending state funds more efficiently and focusing on the state's core functions, including education, transportation and health care.

Sometimes that means the cuts hit before the benefits can be felt, Brownback said.