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Kansas officials increase projected revenues by nearly $178M, easing budget picture into 2016

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TOPEKA, Kansas — Kansas officials projected Thursday that the state will collect nearly $178 million more in revenues than previously thought through June 2015, brightening its short-term budget picture.

But the new projections didn't squelch an ongoing debate over personal income tax cuts enacted in recent years at Republican Gov. Sam Brownback's urging to boost the economy. A top Brownback aide said the new projections show the governor's economic policies are working, while House Minority Leader Paul Davis, a Lawrence Democrat challenging Brownback's re-election this year, said the economy remains stagnant.

State officials, including nonpartisan legislative researchers and members of Brownback's budget staff, now project that Kansas will collect almost $6 billion in taxes and other revenues during the current fiscal year and slightly more, still about $6 billion, during the fiscal year that begins in July.

The previous projections, made in November, were about $5.9 billion for each fiscal year. The forecasters boosted the projections by $103 million for the current fiscal year and by $74 million for the next fiscal year.

Legislative researchers on their own had projected the state would face a budget shortfall of at least $75 million by July 2016, depending on how legislators resolve spending issues this year. The new revenue projections appear to head off such a shortfall for at least another year.

"We believe we'll be in good shape," said Jon Hummell, Brownback's acting budget director, who participated in the forecasting. "We're moving in the right direction. The economy, the economic outlook, looks good and we're confident we'll be OK from a budget perspective, moving forward."

But even with the more optimistic numbers, revenues during the current fiscal year would be $381 million, or 6 percent lower, than the $6.3 billion collected during the previous fiscal year. That's largely because of the income tax cuts championed by Brownback.

Also, the total growth in revenues for the next fiscal year would be less than $32 million — or 0.5 percent.

Democrats have argued that the income tax cuts, enacted in 2011 and 2012, will create long-term budget problems and starve public schools, social services and government programs of funds.

"No matter how his administration tries to sugarcoat it, our Kansas economy remains stagnant," Davis said in a statement. "Sam Brownback's 'experiment' has failed."

Brownback and legislators will use the new forecast in making budget decisions after lawmakers return April 30 from their annual spring break to wrap up their business for the year. The forecasting group includes Department of Revenue officials, members of Brownback's budget stuff, legislative researchers and university economists.

The state had been seeing better-than-expected tax collections before Hummell and other state officials had a private meeting to draft the new fiscal forecast.

Also, ahead of the meeting, the Kansas Department of Labor issued a positive report about employment, showing the seasonally adjusted unemployment rate holding steady at 4.9 percent and the number of private-sector, nonfarm jobs growing slightly in March compared with March 2013.

The department said the seasonally adjusted number for Kansans holding private-sector, non-farm jobs grew by more than 17,000 in March compared with March 2013, an increase of 1.6 percent, to almost 1.13 million.


Online:

Report on new fiscal forecast: http://bit.ly/1mio6AF

Report on employment in Kansas: http://1.usa.gov/J8Lr8F


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