State estimates revenues off $10-20 million from projections

money

WICHITA, Kansas – State revenue projections continue to dip but projected numbers for June show Kansas could be up to $20 million short of what economists predicted, but Republican lawmakers say there’s some light at the end of the tunnel.

The overall outlook is not as good as republicans had hoped and state Democrats are citing the projected shortfalls as a reason Gov. Brownback’s tax cuts are failing, but economists say there’s a lot more to the equation.

Jeremy Hill is the Director of the Center for Economic Development and Business Research at Wichita State University.  He says both personal income and retail sales are growing slower than expected despite income tax cuts breaks passed in May of 2012 and a number of across the board cuts to make up the difference.

“But it still looks like that some of their stimulus expectations really hasn’t come to fruition they really expected you know cutting persona taxes people would have extra money and spend more, I think that’s the problem we’re seeing here,” Jeremy Hill said.

The state fell short of projections by $92 million in April and $214 million in May.

Hill says a sluggish economy has more to do with the estimated $10 to 20 million dollar shortfall in June than tax policy, but both play a role.

Another issue contributing to the shortfall is personal income growth. Kansas ranks among the worst in the U.S. in growth, ranking 45th of 50 states.

Democrats say something has to give.

“People out there are struggling; we definitely have to do something. It’s kind of like robbing Peter to pay Paul. At the end of the day we’re going to have to borrow money to pay some of our bills,” said Sen. Oletha Faust-Goudeau (D) Wichita.

Meanwhile, Republican lawmakers say the worst of the shortfalls can be blamed on a one-time federal capital gains tax.

“Wow there is a deficit it at least shows we are moving in the right direction from the staggering amount we had last month and the month before. “We never want to have revenue shortfalls, in a perfect world we would have a budget surplus every month,” said Sen. Michael O’Donnell (R) Wichita.

A spokesperson for the Department Of Revenue says the $10 to $20 million shortfall is still an early prediction as the real numbers aren’t due until the end of week.

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