Kansas revenue in June was $22 million short of expectations

Kansas missed revenue expectations by more than $22 million in June, the last month of the fiscal year.

For the full year, the state took in $5.52 billion in tax revenue, missing the most recent estimates by nearly $33 million.

However, the state outperformed last year — when the state missed estimates by more than $300 million — by about $70 million. After last year’s underperformance, expectations for 2015 were lowered significantly by the state’s economists in November and again in April.

For June, the state fell short on individual income tax by more than $14 million and on sales tax by more than $11 million. That was partially offset by small gains elsewhere, putting the state $22.5 million, or about .9 percent, below expectations for the month.

“While receipts in June were below estimates, we are pleased that the fiscal year to date receipts were less than 1 percent below estimates and outperformed last fiscal year,” Revenue Secretary Nick Jordan said in a release.

The Legislature passed tax and budget plans in June that would leave the state with a balance of about $36 million at the end of fiscal year 2016, which begins today, without additional cuts from Gov. Sam Brownback.

Lawmakers planned for the governor to make about $50 million in cuts to help shore up the state’s finances. So far, Brownback has cut $1.9 million in a GED incentive program. He has not said what other cuts he might make.

June’s revenue miss won’t help matters, but its impact may be limited. The governor’s office said that despite missing revenue projections, the state will hit its ending balance target for the 2015 fiscal year.

“The ending balance is expected to be approximately $75 million,” said Eileen Hawley, the governor’s spokeswoman. “This is the result of good fiscal management by state agencies and higher-than-expected revenue from non-tax revenue such as insurance premiums.”

Democrats saw the June revenues as evidence that the state’s tax system is broken and contended that the legislative session did little to fix that.

“The state’s budget crisis is a direct result of Brownback’s failed fiscal experiment and the irresponsible tax cuts enacted in 2012 and 2013,” said House Minority Leader Tom Burroughs, a Kansas City, Kan., Democrat, in a statement. “Until Brownback accepts responsibility and we change course, Kansas will continue to be on unstable financial ground.”

This year, Brownback pushed lawmakers to look at consumption taxes rather than income taxes to raise more revenue. Beginning today, shoppers will pay a 6.5 percent sales tax rate instead of 6.15 percent. Lawmakers also postponed additional income tax cuts to help balance the budget. They preserved an income tax exemption for owners of certain businesses, such as limited liability companies, which Brownback championed.

“What should be of great concern to all Kansans is the effect this reckless decision by Brownback to stay the course is having on their personal pocketbook,” Burroughs said. “Citizens are now paying more and getting less from state government and the outlook for the future remains bleak.”

House Speaker Ray Merrick, a Stilwell Republican, on the other hand, called the numbers evidence of why the state needs to spend its money more efficiently.

“This is an example of why we must be sure that tax dollars are being spent as effectively as possible,” he said in a statement. “To help reach that goal, Republicans authorized an efficiency study to pinpoint smart and precise ways to ensure the state is providing services in the most productive and up-to-date way possible.”

This story was originally published June 30, 2015 at 5:41 PM with the headline "Kansas revenue in June was $22 million short of expectations."