Kansas missed revenue estimates by $12.7 million in October.
That will widen a budget shortfall for this fiscal year, which lasts through June. The state is on pace to have a budget hole of approximately $75 million. Gov. Sam Brownback will not say whether he plans to make budget cuts.
The October shortfall can be primarily attributed to sales tax receipts, which came in at $10.7 million, or 5.4 percent, below estimates. Corporate income tax receipts were also down, missing estimates by $7.9 million, or 39.5 percent. Individual income taxes partially offset this, coming in at $9.4 million, or 5.2 percent above estimates.
“We continue to experience a rural recession,” Brownback said Tuesday. “Ag and oil prices continue to be low … and we continue to have rural weakness, but fortunately things have been very good for us in the urban markets, Kansas City, Wichita in particular.”
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The state will revise its revenue estimates on Nov. 10, two days after the election. Brownback’s office announced a series of budget cuts and fund sweeps last year on the same day that the state lowered its revenue estimates. The governor would not say whether his administration planned to do the same thing this year.
“I’m not prepared to answer anything on that,” Brownback said. “Let’s see what the numbers do today. Let’s see what the revenue estimators start coming up with, and we’ll have a better feel at that point in time.”
Sen. Laura Kelly, D-Topeka, the ranking Democrat on the Senate budget committee, said she thinks the governor’s office has already determined what areas of the budget it will cut.
“My guess is they’ve got that all lined up and are ready pull the trigger as soon as the election is over,” Kelly said, contending that the governor wants to avoid damage to his political allies a week ahead of the election.
Kelly also disputed the notion that the state’s sales tax shortfall was caused by a rural recession. She said she thinks last year’s sales tax increase has discouraged Kansans from making large purchases and caused people to shop out of state.
“I think we’ve pushed it to a point where a lot of folks, particularly those who live on the state line, are leaving the state to do their purchases,” she said.
Mark Peterson, a political scientist at Washburn University, said the latest revenue news is unlikely to have a major impact on legislative races. All 165 seats in the Legislature are up for election this year.
“It doesn’t do them (incumbent lawmakers) any good, but I doubt that it’s going to change anybody’s mind,” Peterson said. “The folks who blame the governor’s tax cuts for the mess have got the confirmation. And those who believe that happy days are just around the corner, we’ve got this recession in Kansas and as soon as it goes away birds will sing, the sun will rise and will be well.”