TOPEKA, Kan. (AP) – Kansas slashed projections Wednesday for tax collections by $348 million for its current and next budget years, forcing Republican Gov. Sam Brownback to outline new proposals for avoiding a deficit.
State officials, legislative researchers and university economists revised projections for tax collections through June 2017, and their new, more pessimistic numbers left the state with projected budget shortfalls totaling more than $290 million.
Kansas has struggled to balance its budget since the GOP-dominated Legislature cut personal income taxes dramatically in 2012 and 2013 at Brownback’s urging to stimulate the economy. The governor and other conservatives repeatedly touted his fiscal experiment as a model for other states to follow.
But the promised job growth hasn’t arrived, and a growing number of disillusioned fellow Republicans want to reverse a key policy – an income tax exemption for more than 330,000 farmers and business owners – to address the state’s budget woes.
Lawmakers and other officials had anticipated that the new forecast would be more pessimistic than the current one issued in November because tax collections have fallen short of expectations 11 of the past 12 months.
Brownback’s office said his budget director, Shawn Sullivan, would outline budget measures during a Statehouse news conference Wednesday evening. The governor last month ordered immediate cuts at state universities and earlier this month delayed $93 million in contributions to pensions for public school and community college employees.
Even before the news conference, House Minority Leader Tom Burroughs, a Kansas City Democrat, called in a statement for “responsible tax policies that will create a sustainable source of revenue for the state.”
The governor has so far rejected the idea of backtracking on the income tax break for farmers and business owners, or on reductions in personal income tax rates. He has blamed sluggishness in the state’s economy on national slumps in agriculture, energy production and aircraft manufacturing.
The new revenue projections were included in documents prepared by legislative researchers ahead of the Wednesday evening news conference and obtained by The Associated Press from another source.
The forecasters reduced the projection for total tax collections for the current fiscal year by $177 million, or 2.9 percent, to about $5.86 billion.
They also cut the estimate for the next fiscal year that begins in July by nearly $171 million, or 2.7 percent, to $6.04 billion.
The state House and Senate’s budget committees planned to meet Thursday to review the governor’s budget proposals. The full Legislature is schedule to return from an annual spring break next week to tackle budget issues.THE RESPONSEHouse Minority Leader Tom Burroughs (D-Kansas City) released the following statement:
The Kansas economy has deteriorated under the leadership of Gov. Brownback and conservative legislators. The revised revenue number are further evidence of the Republican Party’s failed policies.
Democrats stand ready to chart a new path forward. We support responsible tax policies that will create a sustainable source of revenue for the state. Doing so would allow us to prudently invest in programs and services like education and infrastructure, which help to create a better Kansas for all our citizens.
Annie McKay, Kansas Center for Economic Growth Executive Director, released the following statement:
The lowered revenue expectations released today are the product of failed tax policy – not a broken estimating process.
This latest Consensus Revenue Estimate (CRE) merely echoes the fact that Kansas’ financial health remains in very poor shape. State revenue collections have come in below estimates 11 of the past 12 months. And it won’t get better, because general fund budgets set by policymakers for both this year and the next leave little to no flexibility for when – not if – continued shortfalls occur.
Yet again, the state will bring in less money than it takes to meet public needs. More one-time ‘fixes’ will be used to inadequately support schools, health care, and other areas key to a prosperous future for all Kansans. Unfortunately, unprecedented and unaffordable tax policy continues to wreck our state’s prospects.
Ray Merrick, Speaker of the Kansas House of Representatives.
What no one is talking about is that Kansas collected more in taxes so far this fiscal year than it did last year. That despite the fact that oil and gas revenues are down because of low oil prices, agriculture commodities are down, and the national economy continues to stagnate under Obama. The Kansas unemployment rate is at historic lows, and businesses statewide are expanding and adding jobs. We plan to identify budget solutions in the wrap-up session with a broad, clear-headed view of the actual situation.”
Statement from Governor Sam Brownback:
I am prepared to take executive action to help reduce expenditures, however, the Legislature has a Constitutional obligation to balance the budget and we are hopeful they will work with us on one of the three options Director Sullivan presented today.”
“After carefully reviewing the final CRE numbers I do not believe it would be useful to have a debate about raising taxes on small businesses or anyone else. Instead, we will focus our support and attention on controlling government spending more efficiently.”