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Archive for Tuesday, July 1, 2008

State revenues miss projections in latest quarter

July 1, 2008, 10:54 a.m. Updated July 2, 2008, 12:00 a.m.

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— State government collected $61 million less than anticipated in taxes during its recently ended 2008 fiscal year, a 1 percent shortfall that could create budget headaches.

Officials see the preliminary figures from the Department of Revenue as evidence that the state's economy, like the nation's, has softened. One significant signal was lower-than-expected individual income tax collections.

The state ended its 2008 fiscal year Monday after collecting a little less than $5.78 billion in general tax revenues. A financial forecast predicted in April that tax collections would be

$5.84 billion.

"It's not going to make our lives easy," Senate Ways and Means Committee Chairman Dwayne Umbarger, a Thayer Republican, said Tuesday. "It's going to be some lean times."

The shortfall in anticipated revenues is significant because legislators and Gov. Kathleen Sebelius based the state's budget for the new fiscal year on the financial forecast issued in April by officials and university economists.

Also, the state has been eating up its treasury reserves so that it can sustain court-mandated increases in aid to public schools and spending for ongoing programs.

When legislators finished this year's budget debate, they expected those reserves to be about $120 million on June 30, 2009. Now they're likely to be half that - or less.

Those disappearing reserves mean legislators are all but certain to face a significant gap between anticipated revenues and projected spending if they want to keep programs at current levels past fiscal 2009.

Last week, Sebelius asked state agencies to reduce their planned spending for the new fiscal year by up to 2 percent. Sebelius said Tuesday that her request is "an appropriately cautious approach."

But both Sebelius and Umbarger saw Kansas as relatively lucky.

Sebelius noted that the bulk of the shortfall - some $51 million - occurred in May. Tax collections for June were only $5 million short of expectations, again about 1 percent off.

"We are pleased that we did not have the substantial decline in revenue that we experienced in May," Sebelius said in a written statement.

Umbarger said other states began feeling an economic pinch before Kansas did.

The Rockefeller Institute of Government, a research arm of the State University of New York, said Tuesday that 10 states had declining economies in February, while 36 did in May.

Also, the institute said, 12 states collected less in tax revenues during the first quarter of 2008 than they did in the first quarter of 2007.

Even if Kansas' general tax collections for fiscal year 2008 weren't as strong as predicted, they outpaced collections in fiscal 2007 by 1.9 percent, according to the Department of Revenue.

"We're just not bringing in what was anticipated," Umbarger said. "We're about four to six months behind the curve compared to other states on declining revenues."

Individual income tax collections for fiscal 2008 were about $2.9 billion, or almost 7 percent higher than in fiscal 2007.

However, state officials and university economists had expected those collections to be even higher. Collections for fiscal 2008 fell short of expectations by $50 million, or 1.7 percent.

The Department of Labor continues to report slight job growth in the number of nonfarm jobs over 2007.

Much of that growth has been in government hiring. But a slight growth in mining, construction and some service-sector hiring has offset a decline in manufacturing and other service-oriented businesses.

"We're still concerned about the individual income tax numbers," said Alan Conroy, director of the Legislature's research staff. "Either salaries are not increasing as much as we thought or people are not working as many hours."

Comments

solsken66 5 years, 9 months ago

The State of Kansas could help on energy cost by cutting the work week to four/ten hour days. This would also help the employee save on gas. A few states have already implemented the 4day/10hour work week.

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solsken66 5 years, 9 months ago

The purse strings are tightening up for everybody. Hey, the State of Kansas is already betting on gambling to bring in more money even before the casinos have been built. That is definitely a gamble!

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imastinker 5 years, 9 months ago

Godot - The more I get taxed, the less hours I get worked too. I am more likely to remodel my bathroom, fix my own car, and cut my own grass. Most of these people charge in the neighborhood of $65/hr, and that's after tax money for me, making it closer to $100/hr. I don't get paid anywhere near that!So, not only does the state lose my income money, they lose the income taxes off the person I would have paid.

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Godot 5 years, 9 months ago

"We're still concerned about the individual income tax numbers," said Alan Conroy, director of the Legislature's research staff. "Either salaries are not increasing as much as we thought or people are not working as many hours."The number of Kansans who are retiring or dying exceeds the number of new, working citizens.

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deskboy04 5 years, 9 months ago

I think that we should quit wasting our tax dollars on things that aren't important to me. But I don't want any cuts to the things that I care about. Of course, I'm not sure about any of this.

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macon47 5 years, 9 months ago

i wish the state, the city, and usd497 were forcedto live with the money they take inlike we have to at our house.they just print more money.what a wasteno money for teachersbut we can build two playing fields.no money for streets, but we canrun an emtpy bus system

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Oracle_of_Rhode 5 years, 9 months ago

1029,In your unfortunate state of abject ignorance and malice towards others, you have composed perhaps the most hilarious posting ever on LJW. Kudos to you sir!

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Godot 5 years, 9 months ago

Try basing next years' budget on this years' revenue, less 2% for good measure. Basing a budget on an anticipation of increased revenue is just stupid.

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toe 5 years, 9 months ago

Cut taxes, eliminate services, reduce state payroll, and sunset all programs annually.

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solsken66 5 years, 9 months ago

The LJW needs to get information about the annual pay for all directors in each state agency and post the annual salary for each position. That would probably be an eye opening experience for all taxpayers. Then find out who the private entities are whom receive monies from the state paid by all the taxpayers of this state.

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sinedie 5 years, 9 months ago

There is no such thing as "over-spending" in reality - only in politics. Every cent is being spent on something, and in case you haven't taken a look at an agency budget, they're not exactly buying yachts.Yes, there are ways to spend money efficiently, and yes fiscal sanity should be maintained, BUT expenditures grow every year, no matter what. Even if we did not create any "new" spending, we would still have steadily growing budgets. This "lower our taxes no matter what" approach is the policy equivalent of closing your eyes and ears, hoping the real world will go away.

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budwhysir 5 years, 9 months ago

Maybe they should have intercepted more of the stimulus checks

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Victoria 5 years, 9 months ago

Tax revenues down??? And that is a surprise to anyone? No one has any extra money after paying utility bills, house payment, groceries and gas. People are spending all they have just to get by so OF COURSE the revenues are down! Hello out there!!!

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imastinker 5 years, 9 months ago

Municipalities and other governmental bodies have been benefiting from this for years. As a house appreciates, they can maintain a constant tax rate and increase spending. We will either have to drastically increase tax rates or decrease spending in the coming years.I vote for decreasing spending!

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jaythomp11 5 years, 9 months ago

1029 (Anonymous) says: We must straighten our path if we want to be the great Christian nation that God intended for the U.S.A. to be. Jim Ryun would have never let this happen. When I go to the polls in November, I will be voting republican, republican, republican!-----------------------So what does this mean for me since I am Muslim?

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bobberboy 5 years, 9 months ago

The State offices should only operate 4 days a week. Just think how much that would save in energy costs.

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TheOriginalCA 5 years, 9 months ago

notnowdear (Anonymous) says: So what? You can thank Bush for that.======================Is Bush the Kansas governor too now?

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creamygnome 5 years, 9 months ago

I'm wondering if they'll release the information pertaining to how much over-spending they've done in the lastest quarter.

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budwhysir 5 years, 9 months ago

The state cutting spending? moneys already been spent, this is when a budget problem becomes a credit nightmare. Oh well think I know who will suffer this one

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1029 5 years, 9 months ago

To all the latte liberal dummiecrats: this is why intelligent republican citizens elect leaders who will lower our taxes. The best way to kill off our lower citizenry and consolidate power is to financially starve these worthless state agencies until they can no longer afford to function. Stop the lower citizenry from voting and multiplying and this country will return to how it was in the good old days. We must straighten our path if we want to be the great Christian nation that God intended for the U.S.A. to be. Jim Ryun would have never let this happen. When I go to the polls in November, I will be voting REPUBLICAN, REPUBLICAN, REPUBLICAN!

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welch 5 years, 9 months ago

Breaking news? Economy problems?

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notnowdear 5 years, 9 months ago

So what? You can thank Bush for that.

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Chris Ogle 5 years, 9 months ago

It is just starting. Get ready for the "Douglas County news" Real Estate comps will be coming down, way down. Time to live within our budgets.

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