DALLAS — Kansas revenue collections posted a slight but unexpected increase in September, as all three monthly collections for the first quarter of fiscal 2011 have met or exceeded predictions.
Preliminary figures from the Department of Revenue released on Thursday show $529 million in state general fund tax collections last month, up $3 million from expectations.
State tax collections for the first three months of fiscal 2011, which began July 1, total $1.32 billion. The official prediction of $1.28 billion for the period was adopted in April by the Revenue Estimating Conference.
Officials had expected to bring in $429 million from sales and individual income taxes in September, but those collections fell short at $424 million. However, unexpected increases in the corporate income tax and franchise tax revenues brought total collections into positive territory.
The September revenue report is the second month that includes an increase in the state sales tax to 6.3% from 5.3%. The tax became effective July 1, but July collections did not reflect the tax increase.
Collections in the first quarter of fiscal 2010 totaled $1.19 billion, more than 10% lower than the same period of fiscal 2011.
Gov. Mark Parkinson said the favorable revenue news is encouraging, noting that last year revenue for the first quarter of fiscal 2010 was falling below expectations.
Kansas is on the road to economic recovery, he declared.
“For the third straight month, we are right on target with our monthly revenue estimates,” Parkinson said. “While politicians in Washington remain gridlocked in finding solutions to our nation’s growing debt, thanks to the bipartisan, moderate coalition in the Legislature, here in Kansas we have solved our budget crisis and are moving forward.”
The Kansas economy still has weak spots, the Democratic governor said, including an unemployment rate of almost 7%, which is below the national average of almost 10%.
“We should expect that our economic recovery will have bumps in the road along the way, but today’s news is extremely encouraging and indicates that our state’s economy is stabilizing,” Parkinson said. “While there are still too many people looking for a job, we are heading down the right path to get Kansans back to work and come out of this recession stronger than before.”
Final numbers for total state general fund collections for the first two months of fiscal 2011 show revenues were $10 million more than expected. Tax revenues for July and August were $38 million above the April estimate.
The Revenue Estimating Conference is scheduled to release its first official outlook for fiscal 2012 revenue in November.
Kansas has issuer ratings of AA-plus from Standard & Poor’s and Aa1 from Moody’s Investors Service. Fitch Ratings rates the state’ws lease revenue bonds AA.