The state of Kansas missed tax estimates for the month of January by $6.8 million, serving to widen the state’s budget gap ahead of hearings on how to close the gap.
Lawmakers are set to hold hearings on the governor’s proposed budget Tuesday. Even before the state fell short of revenue estimates in January, the state faced a budget hole of about $190 million through June 2017. The governor’s proposed budget fills that hole through a combination of funding sweeps and budget cuts.
The state took in $534 million in tax revenue in January, which was $6.8 million or 1.25 percent below estimates.
The state beat estimates for individual income tax revenue for the month by $8.2 million, which was 3.4 percent above estimates. However, that was offset by corporate income tax receipts, which fell $8.3 million or 41.4 percent below expectations. The state also missed estimates on retail sales tax by about $4 million and on oil and gas severance taxes by $1.4 million.
For the fiscal year
The state lowered revenue estimates in November. But after three months, the state is more than $26 million below the revised estimates and faces a combined budget shortfall for the current and next fiscal year of nearly $200 million. The current fiscal year ends in June.
The House Appropriations Committees and Senate Ways and Means Committee are set to hold hearings Tuesday on the governor’s proposed budget. The governor would sweep money from the Kansas Department of Transportation and Children’s Initiative Fund, money earmarked for children’s program, to fill the shortfall. It also would change the state’s Medicaid program to save money.
What they said
“Corporate income taxes – which have not had a rate change – and sales tax receipts continue to struggle in part because of weaker aviation, oil and agriculture sectors,” said Revenue Secretary Nick Jordan in a statement.
House Speaker Ray Merrick, R-Stilwell, said in an e-mail that “revenue numbers are a reflection of a downward trend in retail sales that is affecting many states in the region. Even so, the Appropriations team is putting together a deliberative and thoughtful budget solution.”
Senate Minority Leader Anthony Hensley, D-Topeka, blamed the governor’s tax policies, which have shifted toward a greater reliance on sales taxes. “It’s easy to raid KDOT (Kansas Department of Transporation) and that’s just what I presume they’ll continue to do,” he said. “… I mean, they’re not going to admit what the real problem is.”