Kansas November revenue beats lowered expectations

At last, Kansas tax receipts didn’t disappoint, beating estimates for November by about $8 million, the Kansas Revenue Department reported Tuesday.

It was a bit of welcome news after officials in early November revised revenue estimates downward by nearly $160 million for the fiscal year that will end in June.

For November, individual income tax receipts were $3 million higher than expected, and sales tax receipts were more than $3.5 million above estimates, the department said.

Sales tax receipts for the month were $17 million higher than in November 2014.

“Individual income tax receipts continue to reflect growth and a low unemployment rate,” Revenue Secretary Nick Jordan said in a written statement.

Receipts had come in below estimates for months. But Senate Minority Leader Anthony Hensley said it wasn’t time to celebrate. The latest numbers are the result of lowered expectations, he said, and the budget for the fiscal year remains in danger.

“We’re still on thin ice,” said Hensley, a Topeka Democrat. “We’re virtually at zero in terms of an ending budget balance, so it remains to be seen what the Legislature will have to do to balance the 2016 budget. We have a lot of heavy lifting to do.”

But Rep. Marvin Kleeb, an Overland Park Republican and House tax committee chairman, said the fact that the revenue numbers came in above expectations is important. The state’s sales tax receipt estimates should have been lowered a year ago when sales tax revenues were down nationally, he said.

Kleeb called the report on income tax receipts “very positive,” particularly in light of the January 2015 income tax rate decrease, he said.

“That shows our wages and employment are strong,” he said.

Overall for the month, revenue came in $14.6 million above expectations. Revenue collections, including corporate franchise fees, insurance premiums, interest, transfers and agency earnings, were $439 million for November, the department said. Total receipts so far for the fiscal year are $2.3 billion.

Earlier in the month, with revenue estimates lowered, Gov. Sam Brownback’s budget director announced budget adjustments of $124 million, a move that allowed the state to keep paying its bills.

The more pessimistic revenue forecast was tied to slumps in the farm economy, the oil and gas industry, and consumer spending. A group of university economists and state officials makes the revenue estimates.

The Brownback administration and state legislators have struggled with the budget in recent years. Last session, lawmakers increased sales and cigarette taxes to close a huge budget hole. Critics have blamed the budget shortfalls on a GOP-led tax policy, which cut income taxes as a way to boost the state economy.

House Minority Leader Tom Burroughs, a Kansas City, Kan., Democrat, said that after the Republican-led tax increases last session and the recent lowering of revenue estimates, it makes sense that tax receipts would come in higher than expected.

“As Kansans do their holiday shopping, they should be aware that they are paying more in sales tax now than at any point in time in the state’s history,” Burroughs said in a written statement. “The Kansas Republican tax policy is a failure.”

This story was originally published December 1, 2015 at 3:31 PM with the headline "Kansas November revenue beats lowered expectations."