Amid budget woes, Kansas weighs changing monthly tax reports

AP News
Posted: Oct 04, 2016 7:10 PM
Amid budget woes, Kansas weighs changing monthly tax reports

TOPEKA, Kan. (AP) — Cash-strapped Kansas would drop monthly reporting on the state's finances that has created political problems for Republican Gov. Sam Brownback's allies under a proposal outlined Tuesday by a task force he appointed.

The task force included the proposal among its recommendations for improving the accuracy of the state's twice-a-year forecasts for how much money it expects to take in. No longer would monthly reports compare tax collections with projections. Instead, they would compare that month's revenue with the same month in the previous year.

Kansas has struggled to meet revenue targets and balance its budget since GOP legislators slashed personal income taxes in 2012 and 2013 at Brownback's urging as an economic stimulus. Tax collections were nearly $45 million less than anticipated in September and fell short of expectations for 32 of the 45 months — 71 percent of the time — since the first tax cuts took effect.

For at least several decades, monthly comparisons of tax collections against projections have indicated how the state's budget is faring. But the term-limited governor's fiscal policies are a major issue in legislative races, and the reports have been a regular dose of bad news ahead of the November election.

State Sen. Tom Arpke, of Salina, one of 14 conservative Republicans to lose their seats in the August primary, said ending the current monthly reporting "is not a good idea."

"We should have a monthly idea of where we are and where we are going," said Arpke, also a member of the Senate Ways and Means Committee.

The state's current revenue projections are produced in the fall and revised again the following spring by legislative researchers, Department of Revenue officials and the governor's budget staff, along with university economists.

Brownback's administration is going ahead with proposals from the task force to improve economic modeling and agency information-sharing. Legislative researchers would have to sign off on changing the monthly reports on tax collections.

Task force chairman Sam Williams, the former CEO of a Wichita-based marketing and advertising agency, said its proposals would make the estimating process more trustworthy. The state would publicly report more details about what data goes into its forecasts.

"I would encourage you, as you report this," Williams told reporters during a Statehouse news conference, "to do the same thing we as a working group did, and that is to get out of the current reality and get up to what we're trying to do."

Budget Director Shawn Sullivan acknowledged that if the state changes its monthly reporting, Brownback's aides will have to work through issues raised by reporters during the news conference, such as what information lawmakers would receive.

But state Sen. Laura Kelly of Topeka, the Ways and Means Committee's ranking Democrat, wary of the proposals, particularly the change in the monthly tax collection reports.

"Clearly, this is an effort to get that out of the news because it has been bad and probably will continue to be bad," Kelly said.

Brownback and his top aides have blamed the continued shortfalls in monthly tax collections on sluggishness in parts of the economy affecting many states, including agriculture and energy production.

They've rejected arguments from critics that the tax cuts Brownback championed were a failure and reckless policy. But the governor has acknowledged that dozens of tax policy changes in recent years make projecting revenues more complicated.

"We're finding it more and more difficult because there's a bringing together of both tax policy changes and the economy," Revenue Secretary Nick Jordan said in an interview before the news conference.


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