TOPEKA — The state of Kansas exceeded by $2.6 million anticipated tax collections in April after scaling back official revenue projections for a second time in the current fiscal year, officials said Monday.
The Republican administration of Gov. Sam Brownback welcomed the monthly report because the task of closing a budget deficit in the current and upcoming fiscal years might be a bit less challenging. The April uptick reflected improvement in accuracy of sales tax and individual income tax projections. Revenue from the corporate income tax, cigarette tax and the oil and gas severance tax fell short of the mark.
“We are happy to see individual income tax receipts increasing compared to last year,” said Nick Jordan, secretary of the Kansas Department of Revenue. “We are also pleased to see use and sales tax receipts increase for the second month in a row.”
The state’s revenue status on a basic set of benchmarks reflected escalation in the statewide sales tax rate to 6.5 percent from 6.15 percent last July. Legislators and Brownback also agreed to eliminate most personal income tax deductions.
The 2016 Legislature adjourned the main portion of the annual session early Monday morning after passing a bill that left Brownback to make as much as $80 million in unspecified cuts to balance budgets in the current and upcoming year.
In addition, a decision by the Kansas Supreme Court requiring infusion of more state aid to K-12 public schools could complicate budgeting.
Following implementation of sweeping state income tax cuts in 2012 and 2013, the state has had difficult attaining tax revenue goals.
The Department of Revenue collected $584 million in taxes in April, when the official projection was $581 million. The surplus was 0.5 percent.
The state government fell $8.5 million short of the official revenue estimate in March and foreshadowed a decision in mid-April to shrink expectations during the next 15 months by $228 million. State officials and university economists last month slashed projected revenues through June 2017 by a total of $348 million due to persistent weakness in the agriculture, energy and aviation sectors.
A $53 million shortfall in February led Brownback to impose a 3-percent across-the-board reduction in spending by state public universities. In the latest budget deal, which would shield K-12 school from fresh cuts, leaves in place for a second the $17 million reduction for higher education.
“It is disappointing to have already received $17 million in state appropriations cut to our six state universities in this current year,” stated Shane Bangerter, chairman of the Kansas Board of Regents. “To extend any cuts into next year would be detrimental to the future prosperity of Kansans.”
He also made reference to power of the Board of Regents embedded in the Kansas Constitution while expressing disenchantment with a provision in the budget bill directing an extra $1 million in cuts to both Kansas State University and the University of Kansas. The adjustment was made to benefit the four other universities in the state system.
That bill sent to Brownback also endorses recommendations made by the governor to delay a $100 million payment to the state’s pension system and transfer to the state’s general fund about $185 million that had been earmarked for highway projects.