Newspaper article The Topeka Capital-Journal

June Tax Revenue Could Miss Estimates ; Collections Likely to Be $30 Million Short of Target

Newspaper article The Topeka Capital-Journal

June Tax Revenue Could Miss Estimates ; Collections Likely to Be $30 Million Short of Target

Article excerpt

State officials will reveal Friday how much revenue Kansas collected in June, but Gov. Sam Brownback's administration already has lowered expectations, publicly saying the figure likely will come in below estimates.

The strength or weakness of tax collections during the final month of the fiscal year will show how far in the red Kansas ended up compared with the budget passed by lawmakers. The revenue report will show the size of the fiscal hole Brownback must fill to close out the year.

The administration set a low bar last week, when state budget director Shawn Sullivan told lawmakers revenue returns in June would probably underperform estimates. Sullivan's statement was unusual because the administration doesn't normally hint at revenue figures ahead of their release.

"So far, the indications are we'll be below what the estimates are," Sullivan said.

Collections likely will come in about $30 million below estimates for the month, said an individual briefed on the upcoming revenue report.

Sullivan, speaking last week, said individual income tax receipts were in line with collections from June a year ago, Sullivan said, but the collections needed to be $13 million higher to meet the estimate. Corporate income tax receipts will be $20 million to $30 million off estimates for the month, he said.

Kansas already is some $45 million in the hole for the year, Sullivan acknowledged. If June collections fall below estimates, the difference will be tacked onto the deficit.

Brownback is mulling sweeping up to $16 million from the state highway fund and up to $45 million from a Medicaid fee fund to help fill the hole. Sullivan may be able to find an additional $3 million in the Department of Corrections. The final state aid payment to school districts also could be delayed until early July -- a procedure used in previous years. The state has previously held over about $200 million from the final payment, but the Kansas State Department of Education said the amount likely would be closer to $270 million this year.

The aim is to provide the state a very small ending balance, potentially less than $20 million. It is unclear how the shortfall will be overcome if the size of the deficit ends up significantly larger than projected. Sen. Laura Kelly, D-Topeka, worries the state will have trouble scrounging up additional cash.

"We have pretty much devastated every idle fund that we have around here. I suppose we'll go look at some things that we haven't looked at before," Kelly said.

The June revenue report will come on the heels of a rough May report. Tax collections in May fell $76 million below estimates -- a massive shortfall.

During the past year, Kansas has only exceeded monthly revenue estimates a couple of times. …

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