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Kansas tax collections $13M short of expectations in July

Aug 5, 2016  | Ep4150

TOPEKA, Kan. (AP) — Kansas' tax collections fell nearly $13 million short of expectations in July, and the report of the shortfall Monday came on the eve of a primary election in which Republican Gov. Sam Brownback's critics hoped to oust some of his legislative allies.

The state Department of Revenue reported that Kansas collected $425 million in taxes last month. Compared with the state's official forecast of nearly $438 million, the shortfall was 2.9 percent. Kansas has missed its projections 10 of the past 12 months.

The department attributed the shortfall largely to slumps in agriculture and energy production, both key parts of the state's economy. But Kansas also has struggled to hit revenue projections and balance its budget since GOP legislators heeded Brownback's call in 2012 and 2013 to slash personal income taxes as an economic stimulus.

"It means that Sam Brownback's tax experiment didn't work," said state Sen. Laura Kelly, of Topeka, the ranking Democrat on the Senate budget committee. "The governor and his minions are going to have to take responsibility and do something about it."

Even some Republicans have said the income tax reductions did not spark as much economic growth as anticipated. But Brownback has argued that the cuts have boosted growth, only to be offset by larger regional and national trends.

In Tuesday's election, more than two dozen Republican legislators face primary challengers, and most are small-government conservative Brownback allies who've continued to stick by his tax-cutting experiment. GOP moderates are hoping to cut into their clout by tapping into anxiety about the budget and future funding for public schools.

But the Department of Revenue's report said individual income tax collections slightly exceeded expectations and were greater than they were in July 2015. Revenue Secretary Nick Jordan deemed the over-the-year growth "positive."

Jordan acknowledged that the department is concerned about disappointing corporate income tax collections last month. Sales taxes also fell short of expectations.

"Sales tax receipts remain weak in counties with significant agriculture and oil economies," Jordan said in a statement.

A shortfall in tax collections in June prompted Brownback's administration to delay $260 million in state aid payments to public schools. It also diverted money for highway projects and funds within the Department of Corrections to avoid a deficit when the 2016 fiscal year ended June 30.

During its 2016 budget year, the state's tax collections, at $5.75 billion, fell $106 million short of expectations. While the state hit the mark for the year on sales tax collections, individual and corporate income taxes were lower than anticipated.

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