TOPEKA Kansas state tax collections took another nosedive in May, which prompted renewed debate over Gov. Sam Brownback’s tax policies.
The state collected $217 million less in taxes than earlier estimated, according to figures released Friday. That follows April when the state fell $92 million below projections. Recently, Moody’s Investor Services downgraded the Kansas credit rating over concerns about the state’s long-term financial health.
Brownback and his key aides said the dropping revenues were a temporary problem caused by federal tax policy.
“Even with today’s news, we are projected to end the fourth fiscal year of my administration with an ending balance of more than $400 million,” Brownback said.
“There are many positive indicators showing that our economy continues to grow, including more Kansans working than ever before in the history of the state, a 4.8 percent unemployment rate and the creation of more than 53,000 private sector jobs since January 2011,” he said.
House Minority Leader Paul Davis, of Lawrence, who is running for governor, said the April and May revenue figures show Brownback’s tax cuts have been a disaster.
“There is simply no way Gov. Brownback can still claim that his tax experiment is working. It is failing every measure of success and has wreaked havoc on the state budget,” Davis said.
Brownback has signed into law cuts in state income tax rates and measures exempting the owners of 191,000 partnerships, sole proprietorships and other businesses from income taxes. He also set the state sales tax at 6.15 percent when it was originally supposed to fall to 5.7 percent.
The Kansas Department of Revenue reported the state collected about $389 million in taxes during May, when it expected to collect about $606 million.
Tax collections also fell in April, and the total two-month shortfall is nearly $310 million.
Revenue Secretary Nick Jordan said the low receipts were caused by issues surrounding federal tax policy.
Jordan said Kansans decided to pay capital gains in tax year 2012 to take advantage of favorable federal tax rates that were set to expire Jan. 1, 2013. The anticipated tax increase at the federal level was averted by a last-minute deal reached by Congress and President Obama.
“We really believe this is an April, May hit,” said Jordan.
Jordan handed out news stories that showed other states were experiencing similar problems.
In Kansas, individual state income tax collections for May were 57 percent below estimates and 54 percent below collections in May 2013.
For the current fiscal year, which ends June 30, total tax receipts are running 6 percent below estimates and 12 percent less than last year.
Davis said numerous non-partisan analyses have said Brownback’s tax cuts will produce long-term deficits.
“It’s time for him to level with the people of Kansas, if for no other reason than this revenue crisis puts our children’s classrooms at serious risk,” Davis said.
Senate Majority Leader Terry Bruce, R-Hutchinson, said the state budget was in good shape.
“If the state of Kansas is running low on money, the taxpayer is the winner because the taxpayer gets to keep more money in their pockets. Whether or not we have enough money to fund the core functions of government is a different matter. I think we do,” he said.
Statehouse reporter Scott Rothschild can be reached at 785-423-0668 or firstname.lastname@example.org