Newspaper article The Topeka Capital-Journal

State's Projected Revenue Growth Driven by Taxes, Economist Says

Newspaper article The Topeka Capital-Journal

State's Projected Revenue Growth Driven by Taxes, Economist Says

Article excerpt

Kansas is projected to take in 4 percent more revenue this year than last, an increase largely driven by higher taxes, a legislative economist said Monday.

The consensus estimating group -- made up of legislative staff, university economists and administration officials -- issued a new revenue forecast Friday that cut $159 million from previous estimates of how much cash the state expects to bring in during the current fiscal year.

In total, the group now projects Kansas will collect about $6.17 billion -- or 2.5 percent less than previously expected -- during the fiscal year, which ends July 1. That is 4 percent above final receipts during the previous fiscal year.

Chris Courtwright, an economist with the Kansas Legislative Research Department, told lawmakers during a briefing the projected 4 percent year-to-year growth is likely due to increased taxes.

The statement, during a meeting of the Legislative Budget Committee, came in response to questions by Sen. Laura Kelly, D- Topeka, who asked why, in her view, such a high growth percentage was estimated.

"That's probably high because we increased a lot of taxes for fiscal (year) 2016: sales, use, cigarette, income. So I think the 4 percent growth rate in '16 over '15 is probably largely produced by that," Courtwright said.

Courtwright had just completed listing a litany of downward- trending economic indicators that the consensus revenue estimating group looked at when formulating a forecast. Most major indicators have been reduced since the last estimate was issued in April, he said.

The April estimate had used a personal income growth rate of 3.4 percent. For the November estimate, a 2.2 percent growth estimate was used. Estimated real Kansas estimated gross domestic product for 2016 fell from 2.6 to 2.4 percent.

Courtwright also hinted Kansas would take a hit if it lost an ongoing $42 million lawsuit. The case involves a former Pizza Hut magnate who is challenging a massive tax bill the state levied against him years ago. …

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