Kansas Gov. Sam Brownback said Wednesday that he is not considering additional spending cuts or proposing new tax increases to keep the state’s current budget balanced in the wake of disappointing tax collections.
The Republican governor said his administration is working on measures to address the state’s short-term fiscal problems but was not more specific. He said no decisions have been made and state officials continue to track revenue collections closely.
The Department of Revenue reported last week that the state collected $67 million less than expected in tax revenues from the July 1 start of the fiscal year through the end of September — a 4.7 percent shortfall. Legislative researchers had predicted the state, with a $15.4 billion budget, would finish June 2016 with less than $78 million in cash reserves. Their unofficial estimate is now about $11 million.
“There’s a series of things that we’re looking at,” Brownback told reporters after a statehouse event. “We'll make it through this year.”
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The state increased sales and cigarette taxes in July to keep the budget balanced, and Brownback’s budget director announced $63 million in budget adjustments later that month, including some spending reductions. The budget problems arose after the GOP-dominated Legislature heeded Brownback’s call in 2012 and 2013 to enact massive income tax cuts in an effort to stimulate the state’s economy.
The state’s projected cash reserves melt away as tax collections fall short of expectations. Senate Minority Leader Anthony Hensley, a Topeka Democrat and a vocal Brownback critic, predicted last week that the governor would have to make further cuts before lawmakers open their next annual session in January.
But Brownback said: “We'll try to figure a way through it another way.”
As for proposing further tax increases, Brownback said: “We’re not going that route.”
The governor said Department of Revenue officials and university economists are particularly puzzled by a shortfall in sales tax collections. At $585 million during the previous three months, they have fallen nearly $20 million, or 3.2 percent short of expectations.
“The economy just has slowed,” Brownback said.
Department officials, Brownback’s budget staff, university economists and legislative researchers plan in November to issue new projections for tax collections.