DALLAS – After lowering expectations, Kansas hit its revenue target for November as lawmakers prepared for another legislative session with meager resources.
Combined revenues for last month ran $1.36 million higher than forecast, according to Secretary of Revenue Nick Jordan.
Even with the positive monthly totals, the state is expected to face a $345 million revenue shortfall when lawmakers return to Topeka in January.
Jordan said the state received $970,000 more than expected in individual income taxes and $52,000 more in corporate income taxes for November. However, Jordan said other categories point to continued economic weakness.
"Retail sales and corporate taxes continue to show negative growth due to agricultural and energy sector weakness," Jordan said in a prepared statement. "The individual income tax collections for November showed negative growth compared to last year due to the timing of withholding payments."
After a series of monthly shortfalls, Kansas officials reduced the state's forecast for the current and coming fiscal years in November. The new scenario envisioned a $350 million shortfall for the current fiscal year ending June 30, and a $600 million shortfall for the following fiscal year.
When Gov. Sam Brownback announces his budget proposal to the Legislature in November, he will face 52 new lawmakers, many of whom campaigned against Brownback's tax cuts that have forced the state to reduce spending since 2012.
Though Brownback pitched the tax cuts as a fiscal stimulus, the state's financial health has suffered due to a weak farm economy, a prolonged downturn in oil and gas prices, and other factors.
"We started robbing money from the highway fund, we've cut higher education funding, we froze K-12 funding, we borrowed from KPERS (Kansas Public Employees Retirement System)," said Rep.-elect Brett Parker of Overland Park in an interview with radio station KCUR. "If there was an obvious place to go for money right now, it would've been tapped."
Parker, a Democrat from the Kansas City suburb, is one of the newly elected representatives who have pledged to challenge Brownback's austerity measures.
In July, S&P Global ratings lowered Kansas' AA issuer credit rating to AA-minus, citing the ongoing budget difficulties. The outlook returned to stable.
"The downgrade reflects what we believe to be structural budget pressures, as reflected by drawdowns in reserve levels to what we consider very low levels during a period of national economic expansion, despite four rounds of midyear adjustments in fiscal 2016," said S&P Global Ratings credit analyst David Hitchcock.