June 30, 2015
Kansas is kicking off a new fiscal year Wednesday. The state wrapped up last fiscal year with tax collections coming in $22 million below estimates in June. State lawmakers didn’t plan on a big savings account in this new fiscal year, and that makes the monthly revenue numbers critical.
Kansas lawmakers cut taxes several years ago. This year, they raised taxes and made cuts to balance the budget, but those changes still leave a state savings account estimated at under $100 million at the end of our new fiscal year.
“Essentially now, the state’s kind of living paycheck-to-paycheck,” says Annie McKay. She studies the state’s finances for the Kansas Center for Economic Growth.
McKay says the state savings account is less than 2 percent of the overall budget. That means it’s vulnerable to being wiped out if tax collections come up short for several months.
“The problem now is that we don’t have the cushion we once did, so every million that we miss is a big deal to the state’s budget,” says McKay.
Kansas Secretary of Revenue Nick Jordan points out that while June missed the mark, tax collections last fiscal year were higher than 2014.
If tax collections fall too far below estimates in the coming months, Governor Sam Brownback could be required to cut state spending. If tax collections come in higher than expected, the state’s savings account will grow.
Read more from KCUR here.