Topeka Kansas collected $31 million less in taxes than anticipated last month, prompting one of Gov. Sam Brownback’s most vocal legislative critics to predict Thursday the Republican will be forced into another round of budget cuts.
The state Department of Revenue reported the state took in $534 million in taxes, when its official fiscal forecast projected $565 million. The shortfall was about 5.5 percent.
Tax collections were almost equally as short of expectations in August, but the department attributed that month’s shortfall to larger-than-expected income tax refunds. Since the fiscal year began in July, tax collections have been $1.37 billion, about $67 million, or 4.7 percent, off of expectations.
The department attributed September’s lower-than-anticipated tax collections to the decline in energy prices, saying that reduced both taxes collected on oil and gas production and depressed income tax collections as well. The department said a dip in farm income affected tax revenues.
Department spokeswoman Jeannine Koranda said the department doesn’t yet know whether the softness in tax collections tied to those economic issues represents an ongoing trend.
“We know it’s occurring, but we don’t know whether it’s going to replicate,” she said.
The state increased sales and cigarette taxes in July, and Brownback’s administration later announced $63 million worth of budget adjustments to lessen the chances of a deficit in the state’s $15.4 billion budget.
But after August’s tax collections, the state was expected to have a cushion of roughly $50 million in cash reserves in July 2016. That cushion dwindles with September’s shortfall.
The state’s budget problems arose after the GOP-dominated Legislature slashed personal income taxes at Brownback’s urging in 2012 and 2013 in an effort to stimulate the economy. Democrats and other critics contend the tax cuts were reckless, but Koranda said their effects have been anticipated in the state’s official forecasts.
Senate Minority Leader Anthony Hensley, a Topeka Democrat who is one of Brownback’s leading political opponents, said the governor should expect to face more budget adjustments.
“Very quickly, we are going to be in the red,” Hensley said.