TOPEKA, Kan. (AP) - Kansas’ tax collections beat projections for the fourth consecutive month in February, easing pressure on legislators to cut spending immediately while they consider increasing income taxes as a long-term fix for the state’s budget woes.
The state Department of Revenue said Wednesday that tax collections last month were $37 million more than anticipated for a surplus of 12.5 percent. The state took in nearly $332 million while expecting about $295 million.
State officials and university economists issued a new, more pessimistic fiscal forecast in November after Kansas regularly missed its tax-collection targets, complicating efforts by lawmakers and Republican Gov. Sam Brownback to keep the budget balanced. The state’s newfound ability to hit monthly projections suggests the forecast was on target or a little pessimistic.
The report Wednesday marked the first time since March 2014 that the state has exceeded its revenue projections for four consecutive months and the fifth time in the past 10 years.
The projected shortfall in the state’s current budget shrunk to about $281 million. Yet the run of good news still leaves projected budget gaps totaling more than $1 billion through June 2019. Legislators in both parties said they expect to continue pushing to raise income taxes.
“It just gives us some breathing room,” said Senate Majority Leader Jim Denning, an Overland Park Republican. “It should change nothing going forward.”
Even if legislators raise taxes, they don’t expect any new revenue before the current fiscal year ends on June 30. Brownback has proposed internal government borrowing to help tide the state over, and lawmakers have embraced the idea.
For a longer-term fix, Brownback has proposed raising cigarette and liquor taxes and annual filing fees paid by for-profit businesses. Legislators last month approved a bill increasing income taxes to raise more than $1 billion over two years, but Brownback vetoed it.
Kansas has struggled to balance its budget since GOP legislators slashed personal income taxes at Brownback’s urging in 2012 and 2013. Voters last year ousted two dozen of Brownback’s conservative GOP allies from the Legislature, and lawmakers are considering rolling back his signature tax cuts.
The term-limited governor contends the tax cuts are stimulating the economy and the state’s budget problems result from slumps in agriculture and energy production. The fiscal forecast issued in November assumed that the economy would remain sluggish well into 2018.
Since November, the state’s total tax collections, at $3.7 billion, have run nearly $69 million ahead of expectations, or 1.9 percent.
Personal income tax collections are higher than expected and ahead of the same period in 2015-16. Sales tax collections, previously a sore point, are a little better than expected and in line with the previous year’s figures.
Revenue Secretary Sam Williams called the numbers “a hopeful sign” that Kansas residents might “have more money to spend.”
House Taxation Committee Chairman Steven Johnson, an Assaria Republican, said the better-than-expected tax collections at least mean, “We shouldn’t have to worry about melting down further.”
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