Kansas revenue spike raises legislator hopes on school money

AP News
Posted: Feb 01, 2018 6:47 PM
Kansas revenue spike raises legislator hopes on school money

TOPEKA, Kan. (AP) — Kansas collected $165 million in taxes more than expected in January, raising some legislators' hopes that they'll have more money than they thought for meeting a court mandate to increase spending on public schools.

The state Department of Revenue's report Thursday of a more than 28 percent surplus in monthly tax collections came a day after new Republican Gov. Jeff Colyer took office facing a contentious debate in the GOP-controlled Legislature over education funding. The Kansas Supreme Court ruled in October that spending on schools is inadequate under the state constitution.

Lawmakers in both parties have little appetite for increasing taxes after boosting income taxes last year by an estimated $600 million annually to help stabilize the budget. They also oppose making deep cuts elsewhere in the budget so that new dollars can be transferred to public schools.

A surplus in tax collections could help them avoid either unpalatable choice, though key legislators said they want to see whether the trend sticks or whether they're seeing a temporary spike tied to changes in federal tax laws.

"We probably won't know for a few months," said Rep. Kathy Wolfe Moore, of Kansas City, the top Democrat on the House Appropriations Committee. "Hopefully, that's what it means."

The department's report came with a warning from Revenue Secretary Sam Williams that the surplus in revenues is tied to the federal income tax cuts and accompanying changes enacted by Congress at the end of last year.

One change will limit the federal income tax deduction for state and local taxes. Williams said the change encouraged filers to pay state and local taxes early, by the end last year, before the change took effect. Williams said officials need to "temper our expectations."

"I'm cautious about it," Colyer said during a news conference. "It's not a windfall."

The Department of Revenue said Kansas took in nearly $747 million in taxes last month, when the state's official forecast issued in November projected tax collections of $582 million.

It was the eighth consecutive month tax collections have exceeded expectations. Since the current fiscal year began July 1, the state has collected $3.9 billion in taxes, or $249 million more than anticipated for a surplus of 6.7 percent.

House Taxation Committee Chairman Steven Johnson, an Assaria Republican, agreed that federal tax changes are a key reason.

He said the state's tax increase last year may also have prompted some business owners to make early payments, too. Kansas ended its personal income tax exemption for more than 330,000 farmers and business owners and raised tax rates.

Senate Ways and Means Committee Chairwoman Carolyn McGinn, a Sedgwick Republican added: "We're going to have, probably, some highs and lows, and we're not going to have a good average number or a predictable number for a few months."


Follow John Hanna on Twitter: https://twitter.com/apjdhanna .