Archive for Monday, June 30, 2014

State revenues $28 million short for June; $338 million for fiscal year 2014

June 30, 2014

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— State tax collections came in $28 million below expectations for the month of June and $338 million short for all of fiscal year 2014, the Kansas Department of Revenue said Monday.

That report is sure to add fuel to the election-year debate over Gov. Sam Brownback's economic policies, which he says are stimulating the Kansas economy, but which Democrats say have been reckless and ineffective.

The biggest shortfall was in individual income taxes, which were short by $24.8 million, or 10.8 percent for the month.

It was the third straight month that state revenues came in below projections, although the June figures were not as dramatic as the $217 million shortfall in May, or the $97 million shortfall at the end of April.

Still, the June report was worse than Revenue Secretary Nick Jordan had predicted a few weeks ago, when he said he thought the shortfall would be only $10-$20 million short.

The biggest shortfall, both for the month and the year as a whole, was reflected in individual income taxes, which were off by $24.7 million, or 10.8 percent, for the month, and nearly $307 million, or 12.1 percent, for the whole year.

That's significant because individual income taxes make up slightly less than half of all the tax revenue collected by the state.

Department of Revenue officials said that was the result of "a significant drop in estimated payments which are calculated on the previous year's income and reflect a shift primarily in capital gains income."

In 2012, Brownback pushed a massive tax cut through the Republican-controlled Legislature which, among other things, eliminated income taxes on pass-through business income from sole proprietorships and limited liability corporations. That law also reduced tax rates on typical wage income.

The Legislature's independent Research Department estimated at the time that those changes would reduce state revenues by more than $4.5 billion through fiscal year 2018.

But administration officials disputed those estimates at the time, arguing they did not take into account the new jobs and economic activity that would be generated by the tax cuts.

In 2013, lawmakers cut taxes by another $341 million.

Rep. Paul Davis, of Lawrence, a Democrat who is challenging Brownback for re-election, said Monday that the tax cuts had failed to stimulate the economy. He called for postponing the second round of tax cuts, effectively freezing tax rates at their current level, at least until school funding can be restored to pre-recession levels.

“Our governor has given away $2 billion worth of tax revenue without the guarantee of a single Kansas job," said former Lt. Gov. John Moore, a Democrat, who was named a senior adviser to the Davis campaign. "That is not pro-growth; that is profoundly irresponsible."

But Senate President Susan Wagle, R-Wichita, issued a statement saying new investment is being held back in Kansas because of uncertainty about federal policies coming from Washington.

"When Kansans have confidence that federal leaders are taking steps to control debt and excessive regulation, they'll go all in," Wagle said. They will invest their dollars and their ingenuity will boost this economy exponentially."

Comments

Brett McCabe 9 months, 3 weeks ago

Susan Wagle - dumb or dishonest? It's Washington's fault? For those of us who can be a little slow on the uptick, this tax break has never been about the economy or creating jobs. It has always been about shrinking government and paying-off cop orate donors. From those angles, it's a very smart play.

What is more disappointing is the lack of response by we, the citizens. I just visited the WW1 museum in Kansas City and it's unbelievable how similar conditions were prior to that war as they are now in America. Polarization of income at an all-time high, worker disenchantment and a controlling group of power-brokers clinging to the past. What's missing? Some courage and action on the other end.

Philipp Wannemaker 9 months, 3 weeks ago

Susan Wagle, probably both is correct answer.

9 months, 3 weeks ago

Occupy certainly was a start...it's still actively being slapped in the face by big media the corporate owned Gov't. Pure hatred is a difficult rascal to put in it's place. Unfortunately, it's gonna taking getting things (the economy) much worse before it gets better. It's not enough to prove then wrong. They have to break up everything in the place first...nihilistic bastards...

Bob Forer 9 months, 3 weeks ago

We shouldn't be surprised with this. The trickle down theory has never worked, nor will it ever work. it is an invention of the wealthy to fuel their greed. Sam and his fellow republicans can't explain supporting a tax cut for wealthy on the fact that the wealthy have an insatiable lust for more, and that the tax cuts are the payback for all of the campaign contributions from welathy people which got him elected.

No, that wouldn't play in Peroria, would it? So they pay off a discredited economist named Artthur Laffer, and the majority of voters bought it hook, line and sinker. Folks, you got taken in by a slick snake oll salesman.

How does that proverb go? Fool me once, shame on you. Fool me twice, shame on me.

Don't be a sucker the second time around, people. Surely, most of you are not that stupid.?

9 months, 3 weeks ago

There's a lotta intimidation in the air as well...you can loose your job for laughing at your boss who knows the earth is 6 to 10,000 years old. It's not stupidity...it's insanity. And that's when people get hurt.

Jim Slade 9 months, 3 weeks ago

Trickle down works just as it is intended (but not as advertised to the masses).

Money gushes up to the wealthiest in the nation, and the rest of us is left with a trickle.

Randall Uhrich 9 months, 3 weeks ago

Place the blame for this fiasco where it belongs, directly on Sam Brownback's lap. Nothing is off limits in the drive to further enrichen the top one percent. Shameless and repugnant.

Phillip Chappuie 9 months, 3 weeks ago

What is the deal with Jordan and Wagle? The obvious policy failures dump our revenue in the tank and all they can do is blame capital gains and lack of confidence in "Washington"? Really? My meager investments and 401K are ripping and tearing it up and the Dow is all time high. I guess everyone needs a straw man or a scapegoat on occasion. Now how about let us collectively get to work and rid ourselves of all the tea party phony baloney legislators that helped Brownback drive his bus on his roadmap to failure? Garrett Love. Forrest Knox. Mike O'Donnell. Jeff King. Virgil Peck. Kelly from Ark City. Merrick. That is just for starters.

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