Archive for Friday, January 5, 2001

State revenues fall below expectations

Budget officials cautious about reasons for shortfall

January 5, 2001

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— The state collected less revenue than expected in December, and the news created a note of caution for legislators as they prepared to open their 2001 session.

The Legislative Research Department reported Thursday that revenue collections fell $32.7 million short of the predicted $2.09 billion from July 1 through Dec. 31, the first six months of the current budget year.

"It does sound a note of caution that we shouldn't count on revenues coming in beyond what our projections are to finance new things in the budget."

State Budget Director Duane Goossen

At the end of November, revenue collections were running about even with projections, meaning lower-than-expected revenues in December were to blame for the gap between what the state took in and what it expected to collect.

The department and State Budget Director Duane Goossen were quick to point out that one month's worth of collections doesn't signal a sudden slowing of the economy or any trend. Goossen noted that revenue collections sometimes have swung above and below estimates in consecutive months by $50 million or more.

However, Goossen added: "It does sound a note of caution that we shouldn't count on revenues coming in beyond what our projections are to finance new things in the budget."

Predictions for state revenue collections are made each April and November by the Consensus Estimating Group, whose members include the governor's budget staff, other state officials, legislative researchers and university economists. Legislators use the group's numbers in drafting the state budget.

The group predicted the state would take in nearly $2.09 billion through December in its general fund, the largest source of money for Kan-sas government programs and where the state deposits most of its tax revenue. Actual collections were about $2.06 billion. Corporate in-come tax collections, at $99 million, were nearly $21 million short of expectations.

The Legislative Research Department attributed the shortfall to an effort by the Department of Revenue to clear a backlog in processing corporate income tax returns.

Retail sales tax collections fell short of expectations by about $10.7 million. However, the report said January collections would give a better picture of whether the Christmas shopping season was slower than expected for merchants.

"You can't put too much stock in any one month," Senate President-elect Dave Kerr, R-Hutchinson, said.

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