Archive for Friday, May 30, 2014

Kansas taxes fell $217M short in May

May 30, 2014, 2:44 p.m. Updated May 30, 2014, 4:40 p.m.

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— 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 srothschild@ljworld.com

Comments

Devin Wilson 1 year, 3 months ago

We have until November to see if this tax experiment is truly a shot of adrenaline. It's hard to remain optimistic.

Dorothy Hoyt-Reed 1 year, 3 months ago

They shouldn't be able to use the same excuse this month, but I will be interested if they try it again next month.

Dick Sengpiehl 1 year, 3 months ago

Most of us with a math 101 background knew this shortfall was going to happen. We fought against the tax cuts, wrote letters to the editor, called the Governor's office, wrote letters and called our representatives, yet Governor Brownback simply ignores all the advice because of his "shot of adrenaline" the economy will be getting. In the meantime there are significant cuts to education, the arts, essential services that Planned Parenthood gives for women's care, and much more. Our credit rating has been cut two times already with more to come. More cuts will have to come because there simply is NOT ENOUGH recurring revenue to offset Brownshirt's drastic income tax cuts to a portion of the favored populace including the Koch Brothers.

Lynn Grant 1 year, 3 months ago

Good ol' "shot of adrenaline". Waiting, waiting.

Julius Nolan 1 year, 3 months ago

Don't hold your breath. Although, it would be great if brownie would waiting for his miracle.

Fred Whitehead Jr. 1 year, 3 months ago

Well, others have pretty much said it, we have an idiot for governor in Topeka. His slavish devotion to unalterable opposition to the black guy in the White House is bringing Kansas down. The incredible notion that lower taxes will bring business to a state with a governor who is trying to make a shooting gallery of the society and to arrest Federal officials that are doing their job is beyond belief. This Koch Regime puppet has wreaked havoc on the citizens of the state and should be gone.i

Richard Heckler 1 year, 3 months ago

Very reckless money management. Cutting taxes based on the Supply Side Economics illusion and politicians speculation is simply irresponsible.

These ALEC GOP supply siders have spent some time in Washington D.C. What do the results say.

Former President Bush and Congress racked up an average $793 billion deficit each year Bush was in office. This does not seem to bother Republicans, as long as they are in power.

In fact, by the time the second Bush left office, the national debt had grown to $12.1 trillion. Over half of that amount had been created by Bush’s tax cuts for the very wealthy.

Another 30% of the national debt had been created by the tax cuts for the wealthy under Presidents Reagan and George H.W. Bush.

Fully 81% of the national debt was created by just these three Republican Presidents.

Keep a close eye on the Topeka State House cuz this crew will mortgage Kansas to the Wall Street Banks. You know that bunch that backs home loans for jobless people and for those workers who never could afford the loans in the first place = White collar crime.

FYI: Social Security privatization would raise the size of the government’s deficit by another $300 billion per year for the next 20 years.

Armen Kurdian 1 year, 3 months ago

Utterly, completely, and patently false. Deficits under Bush decreased as a percentage of GDP each year until 2008, when they had to pass TARP.. Your next point is totally false too, as nearly half of this nation's debt has been accrued under Barack Obama, and now GDP shrank by 1% in the last quarter. Social Security needs massive reform, retirement age limits raised, and provides the American taxpayer a nice fat negative return over his or her lifetime. Sorry, none of your facts are accurate.

Richard Heckler 1 year, 3 months ago

"Paul Davis said numerous non-partisan analyses have said Brownback’s tax cuts will produce long-term deficits."

Paul Davis is correct. I have read a few of the analysis from a variety of other news sources that reside in other states.

I'd say the Brownback administration is looked upon as a train wreck.

Richard Heckler 1 year, 3 months ago

From the Kansas City Star - YAEL T. ABOUHALKAH Brownback’s tax cuts now full-blown disaster for Kansans

May 30

Even in the make-believe world of Kansas Gov. Sam Brownback and other tax-cut advocates who like to ignore reality, Friday’s news about plunging state revenues was an utter disaster.

It was a disaster for several million Kansans who depend on tax revenues to pay for public services such as schools and roads.

(We know Sam wants to defund public schools and now we know how he intends to do it. http://www.huffingtonpost.com/dennis-van-roekel/exposing-alecs-agenda-to-_b_3223651.html )

And it was a disaster for Brownback as he gets ready to run for re-election.

The state said it collected $217 million less in taxes than it expected.

That came on top of being $93 million short of estimates in April.

In short, the state is bringing in less money because of lower taxes. Seems pretty simple to figure out.

Moody’s downgraded Kansas’ bond rating after April’s dismal report. What could the bond ratings agencies do with May’s meek numbers in hand?

Read more here: http://www.kansascity.com/2014/05/30/5056283/brownbacks-tax-cuts-now-full-blown.html#storylink=cpy

1 year, 3 months ago

"Whether or not we have enough money to fund the core functions of government is a different matter. I think we do." Said senate Majority Leader, Terry Bruce R-Hutchinson. This statement could have been said by any state Senate Majority Republican Leader. This is the Republican Agenda People. Don't think that the Democrats are that much different. This is the new normal. Profits only for the corporate and financial industry only. Democracy has ended. Profits come before middle and working classes' education and health and dietary concerns. It comes before even the most basic requirements for the well being of children and for the physical, mental, and spiritual cohesiveness that a family MUST have in order to produce a society that functions with respectability and personal integrity. The problem the establishment is facing is that when you take away these basic necessities from an already civil society, you create a collective as well as a personal sense of helplessness, when presently the middle and working classes are buying weapons for their children and their "childrens' children" it seems. Guns are a big media story anyway. As we have witnessed...it's getting more and more dangerous...time to vote them all out. What it will take for us collectively to accomplish this event? Must it be so terribly violent? " We The People" are presently sophisticated enough to accomplish this in a very simple and direct way. We don't have that much time however. We are collectively "loosing it". And we have little if any credibility in Washington, let alone in our States. Capitalism...(Big Gasp Here)... Has Failed.

1 year, 3 months ago

The "core functions" of government doesn't include the proper or civil functioning of the middle and working classes...let alone the poor. It's the new normal. Democracy was intentionally ended, but it took ruining Capitalism. The Beginning Is Here...

Richard Heckler 1 year, 3 months ago

John E Arnold former executive director of the E-470 Public Highway Authority in Denver says somebody doesn’t understand that creation of jobs is the way to create economic health.

It has been reported that the Legislature has taken $1 billion from the highway fund and transferred the money to other uses, and that the governor plans to take $571 million more this year. That transfer is at the cost of 10,997 jobs. New and permanent jobs.

According to JOHN E. ARNOLD, each $1 million in highway expenditures would create seven permanent jobs, in addition to the construction jobs. Those are “spinoff” jobs the increased construction activity generated. By that calculus, the $1 billion plus $571 million would be 1,571 times seven new jobs. That’s 10,997 jobs.

The governor has been saying his first priority is the creation of jobs. Yet, the generator is right in his hands. And it’s being turned off.

The governor and Legislature should spend the money in the highway fund on highways and create the jobs our economic health requires.

JOHN E. ARNOLD, Topeka CJOnline Letter

Richard Heckler 1 year, 3 months ago

Kansas’ current constitutional crisis has its genesis in a series of cuts to school funding that began in 2009. The cuts were accelerated by a $1.1 billion tax break, which benefited mostly upper-income Kansans, proposed by Governor Brownback and enacted in 2012.

Overall, the Legislature slashed public education funding to 16.5 percent below the 2008 level, triggering significant program reductions in schools across the state. Class sizes have increased, teachers and staff members have been laid off, and essential services for at-risk students were eliminated, even as the state implemented higher academic standards for college and career readiness.

Parents filed a lawsuit in the Kansas courts to challenge the cuts. In Gannon v. State of Kansas, a three-judge trial court ruled in January 2013 for the parents, finding that the cuts reduced per-pupil expenditures far below a level “suitable” to educate all children under Kansas’ standards.

The judges also found that the Legislature was not meeting even the basic funding amounts set in its own education cost studies. The judges called the school funding cut “destructive of our children’s future.”

http://www.nytimes.com/2014/01/08/opinion/whats-the-matter-with-kansas-schools.html

Richard Heckler 1 year, 3 months ago

Worker's taxes siphoned off by their bosses

My congratulations to workers in 16 states – from Maine to Georgia, New Jersey to Colorado to Kansas! Many of you will be thrilled to know that the income taxes deducted from your paychecks each month are going to a very worthy cause: your corporate boss.

Good Jobs First, a non-profit, non-partisan research center, has analyzed state programs meant to create jobs, but instead have created some $700 million a year in corporate welfare.

This scam starts with the normal practice of corporations withholding from each employee's monthly check the state income taxes their workers owe.

But rather than remitting this money to pay for state services, these 16 states simply allow the corporations to keep the tax payments for themselves!

Adding to the funkiness of taxation-by-corporation, the bosses don't even have to tell workers that the company is siphoning off their state taxes for its own fun and profit.

Last year, Kansas used workers' withholding taxes to bribe AMC Entertainment with a $47 million payment to move its headquarters from downtown Kansas City, Missouri, to a KC suburb on the Kansas side, just 10 miles away. What a ripoff!

For more information – and for ways you can help stop this despicable giveaway – get the full report, entitled "Paying Taxes to the Boss." It's available at www.GoodJobsFirst.org.

http://www.jimhightower.com/node/7723#.UkS9vBaTOX0

Ken Hunt 1 year, 3 months ago

So this means that Supply Side economics does not work? You cut taxes and this will lead to growth? When will people stop buying this and seek a middle ground based on data and information.

Armen Kurdian 1 year, 3 months ago

We've seen what very high tax rates can do to business in states like California, Illinois, and New York, and business leave the state. KS can point to an unemployment rate much lower than the national average, so a lot more people are working relative to most other states, which is an exceptionally positive development. But tax cuts which are not properly instituted can also cause problems, as we might potentially be seeing.

Bart Johnson 1 year, 3 months ago

All of you who are complaining that the state is not stealing enough from your neighbors are free to make up the shortfall out of your own pockets.

Jim Slade 1 year, 3 months ago

We already are through the increased sales tax, but thanks Liberty_One.

Dorothy Hoyt-Reed 1 year, 3 months ago

Supply side economics is a farce. Successful economies work from the bottom up. Customers have money to spend on stuff, either needed or wanted. You have the stuff they want or need, so you sell to them providing you and your employees with more money which in turn is spent on stuff. Now if you get really busy and people love your stuff, you hire more workers, and hopefully give your other workers a raise, who will then feed that money into more stuff. Why would you hire more workers just because you got a tax cut? You can't make more stuff than will sell. Maybe you could build some other stuff or maybe you could pay your employees more, so they could buy more stuff, but that isn't what's happening is it? It's no longer a goal to buy stuff; it's a goal to amass more money. Money has become the goal, instead of the means to attain your goal.

Bart Johnson 1 year, 3 months ago

Businesses are taxed on their profits, not their losses, hence the most successful business owners will have the largest tax bill while the owners who are failures or are marginal will pay little or no tax. Thus business taxes take money away from those who are the best at investing money as judged by society as consumers. This makes as much sense as benching your first and second string quarterbacks and giving a random guy off the street the starting job.

Cille King 1 year, 3 months ago

In Kansas, 190,000 businesses pay no state income tax, including Koch subsidiaries - no matter how much or little their profits, or how many people they hire, or how much or little they pay their employees. There is no relationship to the Brownback tax cuts and what is good for Kansans as a whole.

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