Archive for Wednesday, April 30, 2014

Kansas revenue in April falls sharply below estimates

April 30, 2014

Advertisement

— Kansas tax receipts fell sharply in April, decreasing 30 percent below April 2013, and prompting a round of political finger pointing as lawmakers reconvened after a three-week break to finish the year's legislative business.

The figures surprised legislative leaders because the drop-off occurred less than two weeks after budget experts and Gov. Sam Brownback's administration submitted a revenue estimate that indicated state coffers were in good shape for the rest of the fiscal year.

House Speaker Ray Merrick, R-Stilwell, said budget leaders would analyze the new numbers "and make prudent decisions that will continue to ensure that the state meets its funding obligations."

The revenue figures ignited immediate political fallout.

Brownback, a Republican, blamed Democratic President Barack Obama, saying his "failed economic policies" were affecting states throughout the nation.

A key reason given by Republicans for the decreased revenue totals was that tax collection totals in April 2013 were inflated because Kansans paid capital gains in tax year 2012 to take advantage of more favorable rates that could have expired in 2013. That projected tax increase never happened because of a deal reached between Congress and Obama.

"What we are seeing today is the effect of tax increases implemented by the Obama administration that resulted in lower income tax payments and a depressed business environment," Brownback said.

Kansas Department of Revenue Secretary Nick Jordan said states nationwide were experiencing similar drops, including Michigan where collections were off 42.6 percent.

House Democratic Leader Paul Davis, of Lawrence, and the likely Democratic challenger to Brownback in November, said Brownback's tax policies was the cause of the revenue downfall.

"This is certainly cause for alarm and further proof that the Brownback tax plan is not working, and is draining revenues from the state at a very rapid rate that will impede our ability to fund public schools and other critical services," Davis said.

The Legislature passed and Brownback signed cuts in state income tax rates and repealed state income taxes paid by nearly 200,000 business owners. The state income tax accounts for the largest share of revenue the state receives.

For April, the state collected $226 million in individual income taxes. That was half of what it collected in April 2013, and it was 28 percent less than budget experts thought the state would get in the estimate put out April 17.

For total taxes collected in April, the estimate was $93 million, or 15 percent off.

For the fiscal year, which started July 1, 2013, Kansas has collected $4.5 billion in total tax revenue, which is nearly 10 percent less than what it collected in the previous fiscal year.

The state economy may also be suffering from slow growth in agricultural and aircraft product exports, Jordan said.

In the latest revenue estimate, budget leaders said while the U.S. and state economies continued to grow, the growth has not been as strong as previous post-recession recoveries. "Uncertainty remains as a number of economic indicators are estimated to show only modest improvements over the next few years," said a memo from the Kansas Division of the Budget and Kansas Legislative Research Department.

On Wednesday, the House budget-writing committee approved a bill that includes additional funding for social services, but excludes a 1.5 percent pay raise for state civil service employees. The Senate is considering its own proposal.

Senate Democratic Leader Anthony Hensley of Topeka said it was hypocritical for Brownback to take credit for revenue increases in January and now blame Obama.

"This isn't someone else's fault. It is a self-inflicted budget crisis that is a direct result of Brownback's failed experiment and the people of Kansas are once again suffering the consequences," Hensley said.

Earlier Wednesday, officials with the Washington, D.C.-based Center on Budget and Policy Priorities were in Topeka with their report that blasted the Brownback tax plan. The cuts have failed to boost the economy, shifted the tax burden to low- and middle-income Kansans, and caused large revenue losses, the report said.

"The path you have taken the last couple of years is to try an unproven approach to driving economic growth and that is very risky and imprudent," said Michael Leachman, director of state fiscal research at the center, which is a non-profit think tank that analyzes the impacts of budget policies and promotes the reduction of poverty.

The Associated Press contributed to this story.

Comments

Larry Sturm 1 year, 3 months ago

Brownback has to blame it on someone it couldn't be the massive tax cut the Koch brothers and other like minded corporations got. BROWNBACK BAD FOR KANSAS.

Julius Nolan 1 year, 3 months ago

But according to brownie reading from his Koch talking points memo, it's all Obama's fault.

Joshua Montgomery 1 year, 3 months ago

I'm stunned!

I thought massive tax cuts for "job creators" were going to spur investment and economic growth.

Oh, wait, it doesn't work that way? The real world isn't some kind of Ayn Rand fantasy?

It's time to elect some folks who can do math and don't govern on ideology.

BTW: The next step for Brownback? "We have a revenue shortfall and need to cut spending on education, healthcare and services for low income families." I guarantee it.

James Howlette 1 year, 3 months ago

It's Obama's fault that Brownback enacted that terrible tax policy everyone said would reduce revenue? Was he crediting Obama for putting the state coffers on track last month when the estimates were optimistic?

beth newman 1 year, 3 months ago

The latest is the Koch brothers are pushing Brownback to run for President.

Brock Masters 1 year, 3 months ago

You all underestimate the brilliance of Brownback. He is a genius. His plan worked.

The dropped in revenue has distracted you from the real news story - the FBI probe of his former employees.

Poor Brownie. It has not been a good week.

Maybe Davis has a chance after all. Of course he may be saying, please don't let me win and inherit this mess.

Cait McKnelly 1 year, 3 months ago

Davis will do alright. If BO can inherit the mess Shrub left and at least reverse it then Davis can too. And hey, Brownie will have only had four years to screw things up and not eight!

Mike Ford 1 year, 3 months ago

You gotta love the fact that the geniuses who voted bryllocreme in are going to be stuck with higher property taxes to cover this shortfall after they voted for no taxes. again why to people vote for these people who hand them the knife to cut their hands off economically?

Phillip Chappuie 1 year, 3 months ago

The simple way out of this revenue shortfall is to cut taxes again for those earning over $250,000. Then all the new jobs will balance it out. Brownie's own people have pointed out by their measure that the economic policy is not keeping pace with the surrounding states and rings hollow to it's original promise. He can blame Obama if he likes; even if I saw what the DOW closed at yesterday.

Steve Jacob 1 year, 3 months ago

I think it's history that's against us. The US is in the fifth year of recovery, and historically it almost never gets to year six. Between the markets flat this year and big drops in home sales, this looks like 2000 all over again after the internet/tech bubble.

Fred Whitehead Jr. 1 year, 3 months ago

Of course it is Obama's fault. Every since the black guy got elected president the bigots and racists in the Republican party have surfaced en masse. Donald Sterling (the soon-to-be former owner of the LA clippers) and Clevon Bundy are not the only racists hiding in the GOP. This fool of a governor has returned money to the Feds that has been extracted from Kansans by pains of failure to pay Federal Income Tax and goes to other states who have legitimate governments and leadership. (Not owned by the Koch Regime)

Fred Whitehead Jr. 1 year, 3 months ago

Of course it is Obama's fault, every since the black guy got elected president, every Republican has piled on to the notion that the federal government is out to get us and responsible for all our home-made problems. Brownback has returned federal money in some sort of demented protest by returning money that was extracted from Kansans by the pain of being prosecuted for failing to pay federal income taxes (the next suggestion to Kansans from our demented governor).

Tracy Rogers 1 year, 3 months ago

Wake the hell up people!! He's taking us down and blaming everyone else.

Grégoire Guillaume 1 year, 3 months ago

I believe the citizens of Kansas would do the right thing if they had not been bamboozled with messaging concocted in right wing so called "think tanks" whose job it is to confuse and turn average people against one another. The policies enacted by Brownback have failed on the national level and can be easily debunked by looking historically over the past 30+ years.with stagnant wages and rising inequality..You grow a sustainable economy from the bottom up not the other way around. If you have high taxes on business they will reinvest the profits back in the business to avoid paying taxes at a high rate. This is one of the reason the 1950's were so productive.

Dorothy Hoyt-Reed 1 year, 2 months ago

They keep people distracted with 2nd amendment and abortion.

Clark Coan 1 year, 3 months ago

His ultimate goal is defund every program except highways and prisons.

Kendall Simmons 1 year, 3 months ago

I'm utterly confused.

1) "A key reason given by Republicans for the decreased revenue totals was that tax collection totals in April 2013 were inflated because Kansans paid capital gains in tax year 2012 to take advantage of more favorable rates that could have expired in 2013."

OKAAAAY...so how do Kansans pay capital gains taxes in tax year 2012 on capital gains they don't earn until tax year 2013???

and

2) How does "A key reason given by Republicans for the decreased revenue totals was that tax collection totals in April 2013 were inflated because Kansans paid capital gains in tax year 2012 to take advantage of more favorable rates that could have expired in 2013. BUT THAT PROJECTED TAX INCREASE NEVER HAPPENED BECAUSE OF A DEAL REACHED BETWEEN CONGRESS AND OBAMA"

get turned into

"What we are seeing today is the effect of tax increases implemented by the Obama administration that resulted in lower income tax payments and a depressed business environment," Brownback said.

Indeed, how do

3) "tax INCREASES implemented by the Obama administration that resulted in LOWER income tax payments"??? HUH?????

Oh, wait. Is he saying that the alleged federal tax "increases" resulted in lower STATE income tax payments because those "increased" federal taxes resulted in higher deductions on STATE income tax forms???

Dorothy Hoyt-Reed 1 year, 2 months ago

War is Peace. Freedom is Slavery, Ignorance is Strength.

William Weissbeck 1 year, 2 months ago

Indiana is suffering the same. It's pretty simple math. This is where the "starving the beast" starts to come into play. While on that subject - isn't that the reason the GOP wants to tear down government buildings and lease others? Where will be the face of government once all the buildings but the Capitol are gone?

Commenting has been disabled for this item.