TOPEKA — Kansas revenue fell $6.8 million below expectations in January, continuing an almost uninterrupted streak during the past several months of worse-than-expected collections for the state.
Total tax collections were roughly $535 million, underperforming estimates by approximately 1.25 percent.
Still, the Kansas Department of Revenue highlighted personal income taxes, which exceeded expectations. Individual income tax brought in $8.2 million, or 3.43 percent, more than estimated.
“We are pleased to see individual income tax receipts continuing to grow compared to last year,” Revenue Secretary Nick Jordan said in a statement. “Corporate income taxes — which have not had a rate change — and sales tax receipts continue to struggle in part because of weaker aviation, oil and agriculture sectors.”
Corporate income taxes were $8.2 million below expectations. Sales taxes were $3.9 million under estimates.
Oil and gas severance taxes plunged below estimates. Overall severance taxes took in $1.3 million less than expected — approximately 31 percent off estimates.
With the exception of November, revenues haven’t beaten estimates since February 2015. Since that time, overall revenue forecasts have been lowered twice.
Last month, state budget director Shawn Sullivan proposed nearly $24 million in additional transfers to help keep the current fiscal year budget balanced. The budget year concludes at the end of June.
The state made approximately $637,000 in transfers in January. Agency earnings were nearly $915,000 off estimates, or about 35 percent below the mark. The state took in $1.2 million in interest, beating expectations by 204 percent.
Figures from KDOR show that, for the fiscal year, the state has cumulatively brought in $26 million less than estimated, or about 0.76 percent.
Concerns are greater for the next fiscal year, however. Kansas faces at least a $175 million shortfall. Lawmakers are working to amend the state budget to compensate, but final adjustments likely will have to be made after a new revenue forecast is issued in April.
Senate Minority Leader Anthony Hensley, D-Topeka, said the new revenue figures represented the “same old song and dance.” House Minority Leader Tom Burroughs, D-Kansas City, said what the state is doing isn’t working.
Hensley said he believes problems with sales tax collections can be traced to the sales tax on food. He suspects people on the Kansas-Missouri border, such as in Kansas City, are crossing over state lines to buy groceries. Kansas has no lower rate for food, meaning the state functionally has the highest tax rate on food in the country.
“I think it only exacerbates the need this session to look at lowering the sales tax on food,” Hensley said.
Gov. Sam Brownback has stood by his stance the state should eliminate the income tax. And he continues to support cuts to business taxes passed in 2012, despite the pressure less-than-expected revenues have placed on the budget.
“This was the piece that by far showed the greatest potential to create jobs,” Brownback said last week. “This is the best tax policy in America for small business.”
The Kansas Department of Labor in January said the state gained 9,400 private-sector jobs during the past year. While the figure represents an increase of 0.8 percent, it is well short of the per-year goal set by Brownback of 25,000 jobs.