The Buzz

June 28, 2013

Kansas revenue drops in June; income tax cut to blame

The state’s income was down 6.2 percent from the previous June. For the entire fiscal year, revenue is up.

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Despite the economic recovery in other states, total revenue in Kansas dropped 6.2 percent in June compared with June 2012, state figures released Friday show.

State revenue in some categories was up. But income tax revenue plunged more than 17 percent from the previous June, accounting for the shortfall.

Overall, the state took in $51.3 million less in income taxes this June than last June, the figures show. Sales tax revenue also dropped, although use taxes — on catalog sales — were up more than 10 percent.

The 2012 tax cut bill went into effect January 1. It broadly cut income tax rates.

The Kansas revenue picture was better in May. Overall state revenues were 3.4 percent higher in Mayo 2013 compared with from May 2012, although income revenue dropped that month too.

For the entire fiscal year, state revenue grew 2.7 percent, led by increases in sales, use, and corporate taxes. Income taxes grew by less than one percent, again because of individual tax reductions in the last six months of the fiscal year, which reduced the flow of taxes to the government.

Income tax revenue in June was higher than projections, just lower — much lower — than a year ago.

“We are heading into fiscal year 2014 on firm financial footing and I’m pleased to see that Kansas’ economy continues to improve,” said Revenue Secretary

Nick Jordan in a statement.

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