Tax revenue trends in the state of Kansas continue to register alarms.
Last week, the state announced that revenues for August came in more than $10 million short of projections, the third consecutive month that revenues have been $10 million or more short of estimates. That’s not a good sign for the state budget and a terrible trend for many Republican lawmakers running for re-election.
Remember back in May when Gov. Sam Brownback finished the 2016 legislative session by ordering $97 million in cuts in order to balance the budget for this fiscal year? State officials estimated at that time that if revenues came in as projected, the state would end the 2017 fiscal year with a balance of $93 million in the general fund.
Just 90 days after those cuts were announced, revenues are already $57 million short of projections, meaning that $93 million general fund balance has been whittled down to $35 million.
If the state’s budget problems weren’t daunting enough, the state faces a school finance lawsuit that could cost as much as $500 million a year in additional funding for K-12 education. The Kansas Supreme Court will hear oral arguments in that case Sept. 21, and a ruling is expected in early 2017.
Kansas Secretary of Revenue Nick Jordan blamed August’s shortfall on lagging corporate, sales and use tax receipts. Jordan, who has served as secretary of revenue throughout Brownback’s almost six-year tenure, has become adept at identifying reasons for the state’s monthly tax revenue shortfalls. Sometimes it’s sluggish national trends or unanticipated tax refunds. One month it was layoffs in the aviation and agriculture industries. On multiple occasions it has been lagging sales tax collections and corporate income tax shortfalls.
What it has never been, at least not from Jordan’s perspective, is the state’s tax structure, particularly the steep income tax cuts that Brownback and the Republican leadership implemented in 2012 and doubled down on in 2013.
But where Jordan won’t go, Democrats and moderate Republicans happily will. “This is another indication that Kansans need to speak up by voting in November to replace those legislators who have rubber stamped Sam Brownback’s irresponsible agenda,” Senate Democratic Leader Anthony Hensley said last week after the August numbers were reported.
As the August primaries have already revealed, November’s elections are likely to hinge on the impacts of Brownback’s tax policies. That’s as it should be — lawmakers should be judged on the ideas and policies they support.
Two more revenue reports are due before the election. A lot is riding on what they reveal.