Politics & Government

Kansas revenue in June $22 million short of expectations

The state took in $5.52 billion in tax revenue over the last 12 months, about $70 million better than last year.
The state took in $5.52 billion in tax revenue over the last 12 months, about $70 million better than last year. File photo

Kansas missed revenue expectations by more than $22 million in June, the last month of the fiscal year.

The state took in $5.52 billion in tax revenue over the past 12 months, missing the most recent estimates for the year by nearly $33 million.

However, the state outperformed last year – when the state missed estimates by more than $300 million – by about $70 million. After last year’s underperformance, expectations for 2015 were lowered significantly by the state’s economists in November and again in April.

For June, the state fell short on individual income tax by more than $14 million and on sales tax by more than $11 million. That was partially offset by small gains elsewhere, putting the state $22.5 million, or about 0.9 percent, below revenue expectations for the month.

“While receipts in June were below estimates, we are pleased that the fiscal year to date receipts were less than 1 percent below estimates and outperformed last fiscal year,” Revenue Secretary Nick Jordan said in a release.

The Legislature passed tax and budget plans in June that would leave the state with a balance of about $36 million at the end of fiscal 2016, which begins Wednesday, July 1, without additional cuts from Gov. Sam Brownback.

Lawmakers planned for the governor to make about $50 million in cuts to help shore up the state’s finances. So far, Brownback has cut $1.9 million in a GED incentive program. He has not said what other cuts he might make.

June’s revenue miss won’t help matters, but its impact may be limited. The governor’s office said that despite missing revenue projections, the state will hit its ending balance target for the 2015 fiscal year.

“The ending balance is expected to be approximately $75 million,” said Eileen Hawley, the governor’s spokeswoman. “This is the result of good fiscal management by state agencies and higher-than-expected revenue from nontax revenue such as insurance premiums.”

Democrats saw June revenue as evidence that the state’s tax system is broken and contended that the legislative session did little to fix that.

“The state’s budget crisis is a direct result of Brownback’s failed fiscal experiment and the irresponsible tax cuts enacted in 2012 and 2013,” House Minority Leader Tom Burroughs, D-Kansas City, said in a statement. “Until Brownback accepts responsibility and we change course, Kansas will continue to be on unstable financial ground.”

This year, Brownback pushed lawmakers to look at consumption taxes rather than income taxes to raise more revenue. Beginning Wednesday, shoppers will pay a 6.5 percent sales tax rate instead of 6.15 percent. Lawmakers also postponed additional income tax cuts to help balance the budget. They preserved an income tax exemption for owners of certain businesses, such as limited liability companies, which Brownback championed.

Burroughs said Kansans should be concerned about what Brownback’s tax policies mean for their own pocketbooks. “Citizens are now paying more and getting less from state government, and the outlook for the future remains bleak,” he said.

House Speaker Ray Merrick, R-Stilwell, on the other hand, called the numbers evidence of why the state needs to spend its money more efficiently.

“This is an example of why we must be sure that tax dollars are being spent as effectively as possible,” he said in a statement. “To help reach that goal, Republicans authorized an efficiency study to pinpoint smart and precise ways to ensure the state is providing services in the most productive and up-to-date way possible.”

Reach Bryan Lowry at 785-296-3006 or blowry@wichitaeagle.com. Follow him on Twitter: @BryanLowry3.

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