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Kansas officials say June revenue collections off by $28M, still point to federal tax issues

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TOPEKA, Kansas — Kansas' June tax revenues fell $28 million short of projections, pushing the shortfall for the fiscal year that ended Monday to nearly $338 million, a state official said.

Preliminary figures show that Kansas collected nearly $5.5 billion in taxes and fees in fiscal 2014, Revenue Secretary Nick Jordan said. The projections that lawmakers used to craft the state's annual budget called for Kansas to collect about $5.8 billion.

Revenues in April and May were a combined $310 million short of expectations. Jordan had expected June's collections to be $10 million to $20 million off the mark.

"We're not happy with this at all," Jordan said.

The bulk of the June shortfall, nearly $25 million, was in individual income tax collections. Jordan said taxpayers made smaller estimated quarterly payments to the state than in previous years, reflecting less income that was earned from capital gains.

Gov. Sam Brownback's administration has attributed the numbers to federal tax and spending policies that affected how investors claimed capital gains.

Democrats blame the lower collections on Brownback's tax cuts in 2012 and 2013.

The Legislature's nonpartisan research staff suggested in its report on revenues in May that the shortfalls were caused by a combination of both. But it said it couldn't put a number to how much was tied to each cause.

House Minority Leader Paul Davis, the presumed Democratic nominee for governor, said Kansas "is an anomaly" in that it is seeing declines in income tax collections related to federal tax policies not seen elsewhere in the nation.

"This is just, I think, further evidence that the Brownback tax experiment is failing to grow our economy and creating a massive budget hole," Davis said.

Before Monday's revenue report, state budget analysts were projecting that the state would end the next fiscal year on June 30, 2015, with $56 million in reserves, a number that would be halved as a result of Monday's report. Davis proposed on Monday that future income tax cuts be postponed starting in January 2015.

Jordan said withheld taxes paid by wage earners were holding steady, suggesting that more residents were holding jobs or that workers were earning more.

"This gives us hope going forward that once we get through this, it gets us back to a more normal pattern in July and August," he said.

Other revenue sources, including sales taxes and motor carrier fees, also were below estimates in June. Corporate income taxes exceeded estimates by $2.6 million.

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