Topeka Kansas collected nearly $38 million more in taxes than anticipated in August, raising hopes Tuesday that the state can avoid major reductions in its current budget.
The state Department of Revenue issued a preliminary report showing that the state collected $414 million in taxes during the month. That’s 10 percent more than the $376 million that had been forecast by the state’s official revenue projections.
Both retail sales and individual income tax collections were stronger than anticipated. The surplus made up for a small shortfall in tax collections in July, the first month of the state’s 2011 fiscal year. For the two months, tax collections were a net $35 million ahead of expectations.
Democratic Gov. Mark Parkinson saw the latest figures as confirmation that Kansas’ economy isn’t going to suffer even though the state raised its sales tax from 5.3 percent to 6.3 percent on July 1. The revenue projections accounted for the increase.
Parkinson pushed for the tax increase to avoid further significant cuts in education funding, social services and other programs following multiple rounds of budget reductions in 2009. Critics of the tax increase predicted it would blunt any recovery.
Conservative Republicans still believe the sales tax increase will dampen economic activity. But GOP House Majority Leader Ray Merrick, of Stilwell, acknowledged that the August figures could indicate a positive trend.
“Let’s just hope it continues,” he said.