Saturday, November 2, 2013

State tax revenues continue to fall

By SCOTT ROTHSCHILD, The Lawrence Journal-World

TOPEKA, KAN. — State tax collections continued to fall in October, which Gov. Sam Brownback's administration said shows that his income tax cuts are working.

But his Democratic opponent, Paul Davis, said the numbers prove just the opposite.

The conflicting statements were prompted by the October revenue report that showed state tax collections were $445 million, which was $18 million or 3.8 percent below projections, and 6.7 percent less than October 2012, according to the Kansas Department of Revenue.

For the fiscal year, which started July 1, tax revenue through October, was $1.81 billion, which is 1.5 percent below estimates, and 8.5 percent below the same period last year.

Individual income tax collections for October were 17.4 percent less than October 2012 and 18.7 percent less for the period of July 1 through the end of October as compared with the same time period in 2012.

Kansas Department of Revenue Secretary Nick Jordan gave an upbeat assessment of the report.

"Kansas families and businesses have been given real tax relief for the first time in decades. And lower income tax rates are allowing people across Kansas to spend more of their hard-earned dollars as they see fit in the private sector rather than sending them to Topeka," Jordan said.

But Davis, the House minority leader from Lawrence, said the revenue numbers tell a different story.

"Sam Brownback can try to mislead the people of Kansas, but the bottom line is that this growing revenue shortfall will lead to higher local property taxes and further cuts to our schools. Meanwhile, the jobs Governor Brownback promised are nowhere to be found," Davis said.

The state unemployment rate of 5.9 percent in August has risen from 5.5 percent in January.

Brownback and the Republican-majority Legislature have enacted large cuts in income tax rates, while reducing popular deductions, and eliminating tax credits aimed at helping the poor. They also set the state sales tax at 6.15 percent, instead of allowing it to fall to 5.7 percent as was required by a previous law, and eliminated state income taxes for the owners of partnerships, S corporations and limited liability companies.

Brownback has said the income tax cuts will spur the economy, but Democrats say the cuts favor the wealthy at the expense of middle- and low-income Kansans, and will mean budget cuts to schools and social services.