Kansas Secretary of Revenue Nick Jordan.

DALLAS - After a rebound to the plus side in February, Kansas revenues again fell below expectations in March, according to state Secretary of Revenue Nick Jordan.

Though expectations for the current fiscal year were lowered in November, revenues for March still fell $11.2 million or 2.8% short of projections. Compared to the same month in 2014, revenues were $11.5 million or 3% higher.

Individual income tax receipts beat expectations by $8.7 million but it was not enough to offset shortfalls in oil and gas severance, corporate income and sales tax receipts, Jordan said.

Corporate income tax receipts were $8.2 million, or 18%, below expectations while sales and use tax receipts were $7.8 million short, and oil and gas severance was $5 million lower than expected.

"While the monthly receipts show a temporary shortfall, sales and use tax receipts for the fiscal year to date are $40 million more than during first nine months of the prior fiscal year," said Jordan. "I'm pleased to see individual income tax receipts $8.7 million above what we expected, driven in part by strong employment growth."

In February, state revenues ran $22 million beyond expectations after falling $47.2 million below projections in January.

The falling revenues are challenging efforts in the state Legislature to erase a $600 million budget deficit.

House Minority Leader Tom Burroughs, D-Kansas City, told the Topeka Capital Journal that sweeping state income tax reductions were marketed by the Republican-led Legislature and Gov. Sam Brownback as a "shot of adrenaline" to the heart of Kansas' economy. After three years, Burroughs said, the GOP's tax policy had been exposed as "more like an ax wound."

"Kansas continues to bleed revenue as is evident by this month's numbers," he said. "How we resolve this issue remains unknown as the legislative session is nearly over and we haven't seen a comprehensive balanced budget."

In a March 26 report, the Kansas City Federal Reserve noted that business activity moderated significantly during the month. The Fed indicated that answers to a special question cited West Coast port disruptions as contributing significantly to the weakening.

The composite index of 10th District factory sector activity fell to negative 4 in March, the lowest level since June 2013. A negative new orders figure of 20 accounted for much of the deterioration as it plunged to the lowest level since February 2013.

The employment reading improved slightly to negative 2 but remained near the recent lows. The composite index is an average of the production, new orders, employment, supplier delivery time and materials inventory indexes.

Kansas is rated AA by Standard & Poor's with a negative outlook after a one-notch downgrade Aug. 6. Moody's rates the Sunflower State Aa2 with a stable outlook. With about $3.17 billion of tax-supported debt, Kansas's per capita debt load of $1,112 is above the median of $1,074, Moody's says.

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