Topeka Kansas won at least a month’s reprieve from more budget cuts because its July tax collections were close enough to expectations to be described as “encouraging.”
A preliminary report Friday from the Department of Revenue said the state collected $344 million in taxes for the month. That’s about $5 million, or 1.5 percent less, than the department, legislative researchers and Gov. Mark Parkinson’s budget staff had anticipated.
Tax collections in May and June had been significantly worse, and Kansas ended its last fiscal year on June 30 with a $124 million shortfall in tax collections.
The state was forced to delay tax refunds and aid payments to public schools from June to July. And Parkinson made $160 million in adjustments to the budget for the new fiscal year, including cuts in education funding. Those adjustments followed several previous rounds of reductions.
“The July revenue numbers are encouraging,” the Democratic governor said in a statement. “The good news is that we don’t have to make any immediate changes to our state budget, and our situation is still manageable.”
July and August are usually slow months for tax collections. Revenues pick up in September, when some individuals and businesses make quarterly payments on estimated income taxes and retail stores turn over sales taxes collected on back-to-school purchases.
The state is expected to collect about $5.37 billion in taxes during the current fiscal year, but its projections will be revised in November. Slumping revenues this fall would lead to a more pessimistic forecast — and perhaps force Parkinson to use his power under Kansas law to make unilateral spending cuts to keep the budget balanced.
“I think what we have to look at is September,” said Senate Ways and Means Committee Chairman Jay Emler, a Republican from Lindsborg.
Officials’ expectations that Kansas would collect about $349 million in taxes in July took into account some $31 million in tax refunds the state delayed from June to July. State Budget Director Duane Goossen said officials don’t normally worry about a shortfall of $5 million or less.
“That’s a very good result,” he said. “The results don’t require any remedial answer. We would say that this is on track.”