TOPEKA, Kan. — Kansas saw its tax collections fall $10 million short of expectations in August, and Republican Gov. Sam Brownback is blaming a soft economy even as his critics make his tax-cutting policies a key issue in this year’s elections.
The state Department of Revenue’s report Thursday marked the fourth consecutive month that Kansas has failed to hit its revenue projections, and tax collections have fallen short 10 of the past 12 months. The state collected $427 million in taxes in August when its official fiscal forecast predicted $437 million; the shortfall is 2.3 percent.
Kansas repeatedly has missed monthly revenue targets and struggled to balance its budget since GOP legislators heeded Brownback’s call to slash personal income taxes in 2012 and 2013 as an economic stimulus. On Thursday, an economist with the Washington-based Tax Foundation told Mississippi lawmakers evaluating planned tax cuts that Kansas is “an example of what not to do in tax reform.”
But Kansas’ latest revenue report showed that individual income tax collections were significantly better than expected in August, with sales and corporate income taxes falling short of the mark. The department said slumps in agriculture and energy production are the reason.
Brownback noted during a news conference Wednesday that the state has made increased some taxes and trimmed spending since the big personal income tax cuts. It boosted sales and cigarette taxes last year to close budget gaps, but the governor said it still faced “great difficulties in a couple of the major pieces” of its economy.
“You’ve got to have an economy that’s growing,” he told reporters. “And almost any state in the country and nation in the world that has a strong commodity base to it has been struggling lately.”
As evidence that the economy — and not Brownback’s fiscal policies — are driving the state’s tax-collection shortfalls, the Department of Revenue noted a 10 percent decline in the value of heavy vehicles since last year. Spokeswoman Jeannine Koranda said the data suggests energy producers and farmers aren’t buying as many new vehicles.
She said that when those parts of the economy slump, “You see the sales dropping.”
Koranda also said sales tax collections are missing the mark most in counties in which agriculture and energy production are big industries.
Yet the administration’s data hasn’t quieted the debate over his tax policies, and there’s been a political backlash. Fourteen conservative incumbent Republicans were ousted in last month’s primary election.
Democrats are looking to make gains in November, in the hopes that they and moderate Republicans can form a governing coalition in the GOP-dominated Legislature.
Kansas Senate Minority Leader Anthony, a Topeka Democrat, said the latest revenue shortfall is “another indication that Kansans need to speak up by voting” to replace legislators “who have rubber stamped Sam Brownback’s irresponsible agenda.”
Associated Press writer Emily Wagster Pettus in Jackson, Mississippi, also contributed to this report.
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