Kansas tax collections fall $45M short of mark in September
Topeka ? Another month, another shortfall in tax collections for the state of Kansas.
For the fifth consecutive month, and 10th out of the last 12 months, the Kansas Department of Revenue said Monday that taxes flowing into state coffers came up short again in September, this time by $44.7 million.
That report puts the state in a precarious budget situation. When lawmakers finally wrapped up their business at the end of a special session in June, the budget they had passed was expected to leave the state with only a $5 million balance at the end of the fiscal year.
Since then, though, total revenues — including both tax and nontax sources of state general fund revenues – have come in $67 million short. That means even if revenues turn around and meet projections for the rest of the year, the state would still end the year about $62 million in the hole.
The biggest contributors to the September shortfall were personal income taxes, which were $14.2 million short; retail sales taxes, which were $9.4 million short; and corporate income taxes, which were off by $17.5 million.
Revenue Secretary Nick Jordan said that individual income taxes are an indicator of jobs and employment. And while the amount collected in September fell short of expectations, it was still about $3 million higher than September 2015.
For the first quarter of the fiscal year, individual income taxes were $25.4 million, or 4.8 percent higher than the same period last year.
He said the shortfalls generally were the result of “a continued regional trend of low corporate tax receipts and sales tax receipts.”
But Senate Democratic Leader Anthony Hensley of Topeka blamed the shortfall on Gov. Sam Brownback’s tax policies, which he said should be a central issue in the upcoming November elections.
“Sam Brownback’s continued refusal to truthfully acknowledge and address the failures of his economic policies not only threatens the future of our state, but insults our intelligence,” Hensley said in a statement after the September report was released. “Kansas voters have the power to put an end to the ongoing Brownback budget crisis when they cast their ballots in November.”
There was no indication Monday from Brownback’s office that he intends to order any more spending cuts to keep state spending in balance before the Legislature convenes in January.
But the administration does plan to hold a news conference Tuesday that could change the discussion about state finances by shifting attention onto the revenue estimates themselves.
A task force that Brownback appointed in June is scheduled to release a report recommending ways to improve the state’s revenue estimating process.
For decades, revenue estimates for Kansas have been prepared by the Consensus Revenue Estimating Group. That includes officials from the Kansas Department of Revenue, the governor’s budget office, the Legislature’s nonpartisan research staff, and economists from the University of Kansas, Kansas State University and Wichita State University.
That group meets in secret and reviews data such as employment projections, inflation rates, farm commodity prices, oil and gas prices and other factors that could affect state revenues.
It then looks at historical patterns about how revenue flows into the state throughout the course of a year, and it issues two reports each year detailing how much money the group thinks the state can expect to collect.
The first report, issued in November, is used as the basis for the governor’s budget proposal. The second report in April is what the Legislature uses to craft its final budget.
An aide in Brownback’s office who is familiar with the task force’s report said it will include recommendations to use other sources of economic forecasts and more sophisticated economic modeling software programs commonly used in major businesses.