Archive for Thursday, July 31, 2014

Kansas revenues in July beat expectations by $1.6M

July 31, 2014, 4:17 p.m. Updated July 31, 2014, 5:25 p.m.


— State revenues in July came in $1.6 million above estimates, the first time that has happened since March, the Kansas Department of Revenue said Thursday.

That was good news for Gov. Sam Brownback, who has been hit with a barrage of criticism over previous revenue shortfalls.

“Withholding tax receipts show that more Kansans are working and earning more money, helping grow the state’s economy,” Revenue Secretary Nick Jordan said. “We are cautiously optimistic about these results but pleased to see further evidence that Kansans are getting back to work.”

Overall, the state collected $408.6 million in July. That was 4 percent less than it collected during the same month last year, reflecting the impact of additional tax cuts that have gone into effect since then.

Sales tax collections, at $183.9 million, were down 4.9 percent compared to July 2013. Department of Revenue spokeswoman Jeannine Koranda said that was the effect of lowering the state sales tax rate on July 1 last year.

Because sales tax collections typically lag a month behind the actual sales, she said last year’s number reflected sales that occurred in June 2013, before the rate dropped from 6.3 percent to 5.7 percent.

Individual income tax collections were also down. Kansas collected $147.9 million from income taxes in July, mainly from payroll withholdings, which is almost exactly what had been expected. But that was $15.5 million, or 9.5 percent less than it collected in July 2013.

Koranda said that was the result of the second phase of income tax cuts enacted by the 2012 Legislature. Starting Jan. 1, 2013, the state’s three tax brackets were collapsed into two and the overall rates were reduced.

Additional rate cuts are scheduled through the next four years, until 2018 when the top rate will be 3.9 percent, and the bottom rate will be 2.3 percent.

Still, the July revenue numbers were significantly better than the last three monthly reports, which added up to a combined $338 million shortfall.

Those reports set off a firestorm of criticism in the national news media and from Democrats who said they proved Brownback’s tax cuts were failing to stimulate the economy and were putting the state in a deep financial hole.

Lawrence Democrat Paul Davis, who is challenging Brownback for re-election, said this month’s numbers do not vindicate the governor.

“This news brings us no closer to solving the problem Sam Brownback created with his economic experiment,” Davis said. “The Kansas economy is stagnant and we face (a) more than $1 billion projected deficit in a few short years, calling into question the state’s ability to properly fund our schools.”

But two key legislative Republicans issued a statement Thursday defending the tax cuts, despite the lower revenues.

Sen. Ty Masterson, who chairs the Senate Ways and Means Committee, and Rep. Gene Suellentrop, chair of the House Appropriations Committee, said those tax cuts have stimulated the economy.

“Kansas has added 55,000 private sector jobs since 2011, and we continue to have one of the lowest unemployment rates in the nation,” Masterson and Suellentrop said in the joint statement.

According to figures from the Bureau of Labor Statistics, however, those 55,000 new jobs represent only 5.1 percent growth in private sector employment. Nationwide, private sector employment grew 7.7 percent over that same period.

“While it is good to hear that revenue is not under water for the month of July, this still isn’t the ‘shot of adrenaline’ to the Kansas economy that Gov. Brownback promised,” Senate Minority Leader Anthony Hensley, D-Topeka, said. “This is far from the growth needed to get out of the self-inflicted budget crisis that Kansas is facing as the direct result of Brownback’s reckless income tax cuts.”


James Howlette 3 years, 9 months ago

So this one good month after the three bad ones is because Brownback, but all the previous bad ones were because Obama?

Tracy Rogers 3 years, 9 months ago

Yeah, I find it amazing how Brownback is quick to accept all the credit for good, but has absolutely nothing to do with the bad.

Larry Sturm 3 years, 9 months ago

What about the 300 plus million we are already behind on? 1.6 million is just a drop in the bucket that is turned upside down.

Scott Morgan 3 years, 9 months ago

Not the Scott Morgan running for office.....

Good news I do believe. Good news in a world of downer news. Gonna take some time.

Dave Trabert 3 years, 9 months ago

No, but revenue was ahead of projections seven of the first nine months of last fiscal year...then the capital gains issue hit. No one knows how much of the last quarter's shortfall was die to capital gains but it was likely a significant portion.

By the way, the real shortfall was $232 million from the original estimate...upon which the budget was based.

Philipp Wannemaker 3 years, 9 months ago

Here comes Dave with expected Koch spin, facts and reality be damned.

James Howlette 3 years, 9 months ago

Yeah, that capital gains issue hit Kansas especially hard. Harder than most neighboring states. You know, Kansas with that big reputation for relying heavily on capital gains.

James Howlette 3 years, 9 months ago

“The downgrade reflects Kansas’ relatively sluggish recovery compared with its peers, the use of non-recurring measures to balance the budget, revenue reductions resulting from tax cuts which have not been fully offset by recurring spending cuts, and an underfunded retirement system for which the state is not making required contributions.” - Moody's Investor Service

Joe Blackford II 3 years, 9 months ago

Just to put $1.6 million in perspective:

"Colorado pulled in $2 million in taxes related to the sale of recreational marijuana…in January 2014 alone. "

Cille King 3 years, 9 months ago

"Overall, the state collected $408.6 million in July. That was 4 percent less than it collected during the same month last year, reflecting the impact of additional tax cuts that have gone into effect since then."

Less tax revenue, less to pay the state's bills.

Dave Trabert 3 years, 9 months ago

Why does Paul Davis persist in making false claims about future budget deficits? The number he references was produced at the request and direction of Senator Laura Kelly, using a methodology that KLRD dropped because it creates a false perception of deficits that will not occur.

This explains how budget deficits are fabricated in Kansas.

Philipp Wannemaker 3 years, 9 months ago

Dave, is it not possible that your projections, based on Koch lies, are also very suspect. Sorry Dave, but if you or any Kock group said sun comes up in East, I would need at least 3 independent witnesses that it actually happened. You are a proven liar, so nothing you say is believable.

James Howlette 3 years, 9 months ago

Why do you persist in posting Koch-sponsored propaganda from your Koch-funded website?

Steve King 3 years, 9 months ago

I'm with Phillip. Ramblings of a paid mouth piece.

Steve Jacob 3 years, 9 months ago

I want to add that while Kansas sales tax collections in May-June-July are down, the GNP of the U.S. in that time 4% (yearly adjusted).

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