Government & Politics

Latest revenue miss deepens Kansas budget hole

The Kansas Capitol in Topeka
The Kansas Capitol in Topeka

The budget gap in Kansas has ballooned to roughly $60 million, heating up the debate over the state’s faltering finances as the November election approaches.

The state missed revenue estimates again in September, with tax collections pulling in $44.7 million less than anticipated, the Kansas Department of Revenue reported Monday. That means the state’s budget shortfall has tripled in the last month and increased the likelihood of budget cuts.

The issue likely will be front and center when voters decide in five weeks who will return to the Kansas Legislature. Campaigns that linked conservatives to the state’s financial woes propelled some moderates to victories in the August primary. Many campaigns have continued to focus on the state’s volatile financial picture as Election Day approaches.

A budget sheet from the state’s nonpartisan Legislative Research Department released last month showed that Kansas would have a $5.6 million ending balance in the general fund if revenue estimates were met for the entire 2017 fiscal year.

That hasn’t happened.

Revenue marks that fell short in July and August, coupled with the roughly $45 million miss announced Monday, have widened the budget gap with nine months still to go in the fiscal year.

Collections so far this fiscal year have been $67.7 million below estimates, according to the Kansas Department of Revenue.

Revenue Secretary Nick Jordan said in a statement that the new misses reflected in September’s report were due in part to a regional trend of low corporate and sales tax receipts.

But others, such as Rep. Kathy Wolfe Moore, a Kansas City, Kan., Democrat, pointed to the tax cuts championed by Gov. Sam Brownback and passed by lawmakers.

“It’s clear once again that the 2012 tax plan not only didn’t work, but has been a disaster for Kansas,” Wolfe Moore said. “And so we absolutely, first thing we have to do, is fix the tax plan and put the LLCs (limited liability corporations) back on the tax rolls. ... We have to do it to close the budget hole, but we also have to do it as a matter of fairness.”

Last week, budget director Shawn Sullivan wrote in an email that Brownback wouldn’t ask the Legislature for across-the-board cuts when the session starts in January. Brownback’s administration had asked state agencies and universities to detail the impact of a 5 percent budget cut.

And in recent days, Brownback has declined to give details about what cuts could be made.

“I’m not going to say,” he said during a news conference Friday. “I want to look and see what the situation is, and ultimately this is up to the Legislature.”

Sen. Steve Fitzgerald, a conservative Leavenworth Republican, said lawmakers face a more difficult task in light of Monday’s numbers. But he said the tax cuts aren’t to blame for the state’s financial situation. And he said the budget gap gives the state an “opportunity” to trim the cost of government while maintaining services as best it can.

“We’re in a rough patch,” Fitzgerald said. “And I think this rough patch is not being caused by any particular tax policy. This rough patch is being caused by the reduction in oil prices, gas prices, agricultural commodity prices. This is going to happen no matter what policies you have.”

The latest report means that Kansas has missed revenue projections each month during the 2017 fiscal year, which started on July 1.

“Sam Brownback’s continued refusal to truthfully acknowledge and address the failures of his economic policies not only threatens the future of our state, but insults our intelligence,” Senate Minority Leader Anthony Hensley said in a statement. “Kansas voters have the power to put an end to the ongoing Brownback budget crisis when they cast their ballots in November,” the Topeka Democrat said.

Brownback could soon face more pressure to act from lawmakers such as Senate President Susan Wagle.

Wagle, a Republican from Wichita, pointed to a statute that says whenever “it appears that the resources of the general fund ... are likely to be insufficient to cover the appropriations made,” then the budget director shall begin the process of across-the-board cuts, known as allotments, to “assure that expenditures for any particular fiscal year will not exceed the available resources of the general fund or any special revenue fund for that fiscal year.”

“In this situation, clearly the longer he waits the worse it gets,” Wagle said of Brownback.

Bryan Lowry of The Wichita Eagle contributed to this story.

Hunter Woodall: 785-354-1388, @HunterMw