DALLAS — After three months of falling below projections, Kansas revenues rebounded in July, beating estimates for the first month of the new fiscal year by $1.6 million, according to Nick Jordan, state secretary of revenues.
The figure includes a strong performance from withholding tax receipts: about $168.2 million for the month compared to $167.6 million for July 2013, Jordan said. The rise comes after individual income tax rates decreased up to 10% on Jan. 1, he noted.
"Withholding tax receipts show that more Kansans are working and earning more money, helping grow the state's economy," Jordan said. "We are cautiously optimistic about these results but pleased to see further evidence that Kansans are getting back to work."
Tax cuts in the state since 2012 have proven controversial, with Republican Gov. Sam Brownback promoting the theory that lower taxes would increase economic activity, thereby increasing overall state revenues.
Democrats, led by state House minority leader Paul Davis, Brownback's opponent in this year's governor's race, have called the tax cuts a "failed experiment" that will force deeper cuts in education, state employment and services.
"This news brings us no closer to solving the problem Sam Brownback created with his economic experiment," Davis said in a prepared statement after the figures were released. "The Kansas economy is stagnant and we face more than $1 billion projected deficit in a few short years."
Davis wants Kansas to postpone another route of state income tax cuts scheduled in 2015.
In the last three months of the 2014 fiscal year that ran through June 30, revenues fell $330 million below projections, according to officials.
Kansas was one of three states, including New Jersey and Pennsylvania, downgraded this year by Moody's Investors Service because of factors including revenue under-performance, weak economic growth, and increasing pension liabilities.
Moody's downgraded Kansas' GO to Aa2 from Aa1 on April 30, in part because tax reform led to lower revenues. The state has budget stress from increased pension contribution requirements and additional school funding needs. Standard & Poor's rates Kansas AA-plus with a stable outlook.
Brownback has blamed President Obama for the previous shortfalls in Kansas revenue, but Obama got a chance to tout the nation's second-quarter economic growth of 4.1% in a speech Thursday in Kansas City, Mo.
