Archive for Thursday, December 1, 2016

November revenues meet new, lower expectations; no progress in filling budget gap

December 1, 2016, 4:20 p.m. Updated December 1, 2016, 4:20 p.m.

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— Tax revenues flowing into state coffers barely exceeded the official estimates in November, mainly because budget forecasters significantly lowered those estimates earlier in the month.

That means the state did not add to its looming $350 million budget shortfall in November, but neither did it make any progress in closing that gap.

The Kansas Department of Revenue said Thursday that total taxes collected in November came in at $401.3 million, or 0.3 percent above the newly revised estimates.

That included $174 million in individual income taxes, which was slightly above the new estimate but still $9.7 million, or 5.3 percent below November 2015. Revenue Secretary Nick Jordan said that was mainly due to a difference in the timing of withholding payments.

But retail sales taxes, which are often used as a barometer of consumer spending, came in at only $181 million, slightly below the official estimate and 3.6 percent below November of last year.

“Retail sales and corporate taxes continue to show negative growth due to agricultural and energy sector weakness,” Jordan said.

Another shortfall, which some might consider to be good news, was a drop in cigarette taxes. Kansas collected just over $10 million in cigarette taxes last month, which was a little more than expected, but it represented an 11 percent drop compared with last year. But taxes on other tobacco products, including e-cigarettes, rose 41 percent compared with last year.

On Nov. 10, the state’s Consensus Revenue Estimating Group released new, updated forecasts for the current fiscal year, lowering the estimate by $355 million, or about 6 percent, compared with the previous estimate made in the spring. That means that even if revenues continue to meet the new, lower estimates through the end of June, they would be about $350 million less than the state has budgeted to spend.

The group also said revenues in the next fiscal year, which begins July 1, are expected to grow a mere 1.4 percent, far less than the state needs to keep up with rising costs, creating an estimated $583 million shortfall for that year.

That report prompted some legislative leaders, including Senate President Susan Wagle, R-Wichita, to call on Gov. Sam Brownback to take immediate action to bring the budget into balance. That would most likely require another series of allotment cuts to higher education and other state programs.

Brownback, however, has declined to do so. Instead, he has said he will submit a budget plan to the 2017 Legislature when it convenes in January. And while he declined to say specifically what measures he is considering, his communications office has said he is not planning to enact sweeping cuts or mass layoffs of state employees.

That has prompted some to speculate that he will propose selling off the state’s future tobacco settlement payments in exchange for a lump-sum payment that could help close this year’s budget gap.

Meanwhile, though, state officials are still awaiting a Kansas Supreme Court decision on the pending school finance lawsuit, which many expect will include an order to increase K-12 education funding by hundreds of millions of dollars a year, which would only add to the projected shortfalls.

Comments

Greg Cooper 9 months, 3 weeks ago

$355,000,000? The forecast was lowered by $355,000,00? And the state can not even beat that significantly?

What does it take to make this governor (term very loosely applied) admit there is a tinge of desperation in our financial future? How can he, and his handlers, truly think they're on the right track for the citizens? Do they not care about the future, about our kids?

Wow. I mean, just, wow.

Bob Forer 9 months, 3 weeks ago

So Brownback was demoted from third grade to second garde and he still can't cut it.

There are no more remedial steps available. Time to rid ourselves of this train wreck.

Bob Summers 9 months, 3 weeks ago

This is not difficult.

Cut spending. Fire the drift wood costing the tax payers an arm and a leg.

Government is a leach sucking the blood out of the host. Taxpayers.

Brett McCabe 9 months, 3 weeks ago

That would take courage by the Republican House, Republican Senate and Republican Governor. In this, they also come up about 355-million short.

All talk, no walk. It's the Republican way. Maybe if the deficit was a married woman, then they could really go after that.

Bob Reinsch 9 months, 3 weeks ago

They'd knock her, walk away, and refuse responsibility.

Dorothy Hoyt-Reed 9 months, 3 weeks ago

Shall we start with the governor and his staff?

Richard Quinlan 9 months, 3 weeks ago

The republican candidates of this decade will go down in history as the most ignorant and incompetent in the history of the country. The damage they have done and will continue to do for at least the next four years will take decades to repair. It is a sad day for my dear country.

Gary Pomeroy 9 months, 3 weeks ago

Kind of like the football team calling it a touchdown when they reach the 20 yard line. "Hooray for us!! We reached the downward revised expectations!!"

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