New report on Kansas taxes to figure into debate on budget

TOPEKA, Kan. (AP) — Kansas legislators hope the state is collecting as much in taxes this month as expected or a little more, though they acknowledge a month of stable revenues won’t make closing a projected budget shortfall much easier.

The state Department of Revenue planned to release its monthly report on tax collections Friday. From the start of the current fiscal year in July 2014 through January, the $3.3 billion in tax collections were $66 million short of expectations, or about 1.5 percent, and they’ve been less than anticipated eight of the last 10 months, including in December and January.

“We still have another day of revenues to collect,” department spokeswoman Jeannine Koranda said Thursday. “It’s still too early to say anything.”

The lower-than-anticipated revenues are a factor in the projected deficit of nearly $600 million in the state budget for the next fiscal year, which begins July 1. The budget problems arose after the Republican-dominated Legislature aggressively cut personal income taxes in 2012 and 2013 at GOP Gov. Sam Brownback’s urging to stimulate the economy.

Legislators are likely to consider tax proposals and spending cuts to erase the deficit. If tax collections meet or even exceed expectations in February, most of the projected shortfall still will remain.

“We’re still so far under water, it won’t make it any easier to breathe,” said Sen. Laura Kelly, of Topeka, the ranking Democrat on the Senate Ways and Means Committee.

The state dropped its top personal income tax rate 29 percent and exempted 281,000 business owners and 53,000 farmers from income taxes altogether.

But Brownback’s administration argues that national trends — a recent slump in consumer spending and uncertainty about federal tax policies in 2012 and 2013 causing people to use tax shelters — are to blame for lower-than-expected revenues.

The Department of Revenue said last month that the federal government began processing income tax refunds earlier this year, speeding up state refunds that follow, so that they were $22 million higher than in January 2014. Department officials said in February that the state could see a corresponding drop in income tax refunds — and stronger tax collections.

“Certainly, we are very hopeful for some indication of better numbers going forward,” said House Majority Leader Jene Vickrey, a Louisburg Republican.

 

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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