Thousands of Kansas tax returns, with checks, yet to be opened

TOPEKA – The state has yet to open thousands of envelopes that could contain checks from Kansans paying their state income taxes.

An estimated 70,000 to 80,000 returns still need to be processed by the Kansas Department of Revenue, agency spokeswoman Jeannine Koranda said Monday. Those should be completed by the end of the week, she added.

The contents of those unopened returns – delayed at least in part because of short staffing caused by budget cuts – could be critically important as lawmakers look to address a projected budget shortfall. Many of those envelopes contain checks.

“That is a Catch-22, isn’t it? We can’t afford to open the envelopes to see how much money we have,” joked Gene Countryman, a retired radio show host who lives in Wichita and who is among the Kansans still waiting for the state to cash his check.

The state has collected $82 million less in income tax revenue than it had at this point last year but is projected to finish the year $62 million above last year’s total, according to a memo from the Kansas Legislative Research Department.

That means it must take in $144 million more in individual income tax revenue in May and June than it did last year in order to meet the current estimate of $2.28 billion for the year.

If tax collections miss projections in May and June, then the budget shortfall – estimated to be more than $420 million next year – will grow even larger.

Legislative Research said that the process was at least 10 days behind last year, when the Department of Revenue had opened all tax returns by April 30.

The agency took on significantly fewer temporary workers to open returns and process checks this year, according to the memo.

Koranda said it was not rare for the process to last into May. When the agency realized the magnitude of a last-minute surge of paper returns around April 22, it hired more temp workers and authorized overtime, she said.

Employees from the Department for Children and Families also helped the Revenue Department open returns on Friday.

Some lawmakers said they would be willing to pitch in, too.

“If they got any big, fat ones, let me help you open them,” joked Sen. Les Donovan, R-Wichita, who chairs the Senate Tax Committee.

Donovan said that the unopened returns could represent hundreds of millions of dollars that could be important as lawmakers work to craft a budget fix.

“It does leave a little uncertainty. The hole might not be as deep as we think it is,” he said.

Koranda said experience shows that “most of what is left are payments. People typically file early if they expect a refund and wait until the last moment to mail the check.”

Rep. Ron Ryckman Jr., R-Olathe, who chairs the House Appropriations Committee, said lawmakers need the most up-to-date data to make informed decisions on how to craft a balanced budget and that he was disappointed with the department’s resource management in processing tax returns.

Sen. Laura Kelly, D-Topeka, who sits on the Joint Budget Committee, said lawmakers “cannot make intelligent, wise decisions” until they have a better idea of whether the state will hit its target for income tax revenue.

“This is a really significant number of returns,” Kelly said. “If these are returns that we owe them, we need to know just as much as we need to know if there’s money in those envelopes.”

Kelly noted that in addition to cutting its temporary staff, the agency also reduced its number of full-time employees as a result of across-the-board budget cuts that went into effect in January.

A document Kelly received from Secretary of Revenue Nick Jordan showed that the agency had saved $609,000 by cutting 10 full-time employees from its tax operations staff and reducing its number of temporary staff members.

Countryman said that once he realized the state hadn’t cashed his check – while the county and federal government already had – he called his state senator to suggest “they ought to open their mail to see how much money they have.”

However, Countryman said, if the state never cashes his check, that would be fine with him.

This story was originally published May 4, 2015 at 7:58 PM with the headline "Thousands of Kansas tax returns, with checks, yet to be opened."