State tax receipts for June totaled $22.5 million less than expected, the Kansas Department of Revenue reported Tuesday.
Both individual income tax and sales tax receipts failed to meet projections.
Kansas Revenue Secretary Nick Jordan tried to put the numbers in a positive light, saying that overall tax receipts were $69.9 million higher than the previous year and “were less than 1 percent below estimates” for the current budget year.
But Jordan didn’t mention that the official estimate for the 2015 fiscal year, which ends Tuesday, was lowered in April by $87.5 million. Absent that adjustment, tax revenues would have missed the mark by a much wider margin.
State revenue has plummeted since income tax cuts championed by Gov. Sam Brownbackwere passed in 2012. In the fiscal year that preceded those cuts, the state took in $6.4 billion in tax revenue. This year, collections would have totaled approximately $700 million less even if they had met projections.
The budget problems created by the revenue shortfalls forced the longest legislative session in state history. Lawmakers struggled to address a projected $400 million deficit in fiscal year 2016, which runs from July 1 of this year to June 30, 2016.
In the session’s final days, Brownback pleaded with reluctant members of the Legislature’s Republican majority to pass a $384 million tax increase.
“You can assess blame a lot of ways and in a lot of places, and I’ll accept my share of it,” Brownback said at a rare joint gathering of House and Senate Republicans. “But we are where we are. The state’s watching us. The country’s watching us. You’ve got solutions in front of you.”
Lawmakers narrowly passed the tax package, which consisted largely of increases in sales and tobacco taxes, on the final day of the session. But it won’t generate enough revenue to fully balance the budget. Brownback will have to order additional spending cuts at some point during the budget year.
Last week, the State Financial Council, which includes the governor and legislative leaders, approved a record $840 million certificate of indebtedness to help ease cash-flow problems as the state transitions from one fiscal year to the next. Such certificates essentially allow the state to borrow from itself and tap into “idle funds.” But those loans must be paid back by the end of the fiscal year.
Anthony Hensley, the top Democrat in the Kansas Senate, blamed the state’s ongoing budget problems on “incompetence and mismanagement.”
“Governor Brownback and the Republican Legislature are responsible for the longest session in history, the largest tax increase in history and, now, the largest certificate of indebtedness in history,” Hensley told the Topeka Capital-Journal.
Jim McLean is executive editor of KHI News Service in Topeka, a partner in the Heartland Health Monitor team.
