Editorials

Kansas Gov. Sam Brownback’s tax cuts cause another revenue hit

Gov. Sam Brownback (left) and opponent Paul Davis disagree on how far income taxes should be cut in Kansas.
Gov. Sam Brownback (left) and opponent Paul Davis disagree on how far income taxes should be cut in Kansas. The Kansas City Star

As Kansas Gov. Sam Brownback remains locked in a tight re-election race with challenger Paul Davis, cheerleaders for Brownback’s costly income tax cut experiment have taken on full-time pom-pom duty.

Consider Revenue Department Secretary Nick Jordan.

Just days ago, Jordan celebrated the fact that the state’s corporate income tax collections had soared $21.5 million higher than expected in September. “We’ve worked hard to create a good business climate in Kansas,” he said.

But then came this oh-by-the-way addition in the press release: “As anticipated, individual income tax receipts fell short of expectations primarily because of people calculating their estimated payments, the third of which are due in September.”

So how far “short of expectations” were those income tax revenues? Try $42.5 million — or a whopping 17 percent lower than state budget experts had predicted.

As a result, Kansas in September actually took in $21 million less in total revenues than expected. Yet that grim news wasn’t in the press release. So much for fully informing the public.

The statement also was misleading in contending that officials had “anticipated” that individual income tax revenue would be down for the month. Fact is, the state had published an official projection of $250 million, yet collected only $207.5 million for September.

As for that mumbo-jumbo about people “calculating their estimated payments” in September and thus throwing the state numbers off, The Star reviewed individual income tax receipts to see what had happened during Brownback’s first three years in office.

In reality, the state collected $15 million more than expected in September 2011, $14 million more in that month in 2012 and $2.2 million less in September 2013.

The plunge in individual income tax revenues this September was way outside the norm.

Brownback, Jordan and other tax-cut boosters are on edge these days, especially as Davis pounds away at the folly of the governor’s plan to keep reducing income taxes in the future. Davis correctly wants to postpone that move.

Brownback is trying to spin every bit of good news into a huge success story — ignoring the reality that the lower income tax rates that took effect in January 2013 haven’t brought a dramatic surge in revenue from the bonanza of new jobs Kansas was supposed to enjoy.

This matters a great deal to Kansans. The state can’t run a deficit. So if receipts keep coming in under projections, public services will have to be cut.

With three months now gone in the current fiscal year — July, August and September — the negative effects of the tax cuts on state revenues are coming into clearer focus.

According to state figures, Kansas collected $1.436 billion in 2011 for that three-month period and $1.507 billion in 2012 for the same time span.

But after the tax cuts took effect, overall revenues slid to $1.369 billion in 2013 for those three months and to $1.351 billion this year.

True, some of this slump was predicted, but it’s been worse than projected. When the most recent fiscal year ended last June, state revenues were a stunning $334 million short of projections. Now, Kansas is already $22.4 million underwater for the first three months of the new fiscal year.

Blame the tax cuts for most of these problems in 2014. For example, the state’s own numbers show individual income tax receipts from July through September this year were down a whopping $186 million year from their high point of the same period in 2012.

No amount of cheerleading can drown out that sobering fact for Kansans.

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