Gov. Sam Brownback’s 2012 tax cuts and the resulting budget deficits led to the defeat of many of his legislative allies in the August primaries and are under attack from Democrats hoping to gain seats in the November general election.

DALLAS – With a month to go before the general election, Kansas Republicans are on the defensive after another revenue shortfall announcement.

September revenues fell $45 million below projections, leaving the state $67 million under forecast for the fiscal year that began July 1. Revenues for the state have fallen short in 10 of the last 12 months.

The Kansas Department of Revenue reported that individual income tax receipts were short by about $14 million. Corporate income taxes were more than $17 million below forecast, while sales tax collections were off more than $34 million.

The sales tax figure is significant because the Kansas Legislature in 2015 passed a sales tax increase to offset losses from income taxes. At Gov. Sam Brownback's urging, lawmakers approved a reduction in the income tax rate in 2012 and agreed to exempt certain corporations from taxes altogether.

State officials said that some of the September losses are related to capital gains payments and the stock market.

Brownback put together a committee to determine why revenue shortfalls persist, even after the state lowered revenue projections based on previous shortfalls.

On Tuesday, the committee reported its findings, including a proposal to quit reporting monthly shortfalls. Instead, the panel suggested, the state should only report how the revenues compared to the same month in the previous year. Committee chairman Sam Williams, a Wichita businessman, said that improving the accuracy of the twice-annual forecast would end the need for reports on monthly targets.

"That would then change the nature of that product, and it would be a product that could be relied upon," Williams told the Topeka Capital-Journal. "So then the necessity to report on a monthly basis how we come to projections, we did not feel was relevant because we have the accuracy and the product of the revenue estimate done in a much more accurate manner."

Meanwhile, cabinet agencies submitted reports to Brownback on the impact of a possible 5% budget cut. State officials have acknowledged that the revenue shortfall would mean further budget adjustments.

The cuts would reduce corrections department spending by $17 million and cut spending on children and family programs by nearly $7 million.

The information came from documents obtained by the Capital-Journal under a freedom-of-information request after officials in Brownback's administration sought to withhold the reports.

The documents claimed that spending reductions of that magnitude would "compromise public safety" as well as weaken the Kansas National Guard's capacity to provide a "ready and reliable force."

The Kansas Department of Corrections said the cuts would trim $6 million from community corrections, $1.7 million from juvenile prevention grants and $2.5 million from mental health, vocational and transitional housing services.

 

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.