A state panel Wednesday is expected to lower estimates for state tax collections by a whopping $228 million through June 2017.
That will require spending cuts of about $290 million to keep the 2016 and 2017 budgets in balance. Gov. Sam Brownback’s budget director is set to announce budget proposals later Wednesday.
The state’s Consensus Revenue Estimating group, a panel of state officials, university economists and legislative researchers, met Wednesday to issue its revenue forecast for the rest of fiscal year 2016, which ends June 30, and for fiscal year 2017.
Revenue estimates were lowered by about $94 million for the current fiscal year, which ends June 30, and by about $135 million for fiscal year 2017. Much of the reduction is due to lowered estimates for individual income tax receipts.
Just five months ago, the revenue estimating group revised revenue projections downward from earlier in 2015 by $159 million for the 2016 fiscal year and by $194 million for fiscal year 2017.
Budget problems have plagued the state since Brownback and the Legislature slashed income tax rates in 2012. Brownback said his tax policy would be a “shot of adrenline” to the state’s economy, spurring business and job growth.
Tax collections have been short of estimates in 11 of the past 12 months, prompting Brownback and the Legislature to address the resulting budget shortfalls with spending cuts and budget transfers. In March, Brownback cut $17 million from the state university system.
Earlier in April, the governor delayed a $93 million state contribution to the Kansas public employee pension system. The administrations has transferred hundreds of millions of dollars from the state highway fund over the past few years.
Many lawmakers are frustrated by Brownback’s budget approach. Some want to end an income tax exemption for 330,000 businesses, such as limited liability companies, that is costing the state up to $250 million a year.
But it’s uncertain the effort could go very far when lawmakers return from spring recess for their veto session on April 27. All House and Senate seats are up for election this year, and many legislators want to wrap up the session quickly.
“Neither the House nor Senate appears to have a majority of members willing to address future tax policy during the veto session, which we intend to keep short and focused on present business,” Senate President Susan Wagle said in a statement.
“While veto session is characterized by the art of the possible, our goal is balancing the budget and adjourning the session,” said Wagle, a Wichita Republican.
Brownback has maintained that his tax policy is not to blame for the revenue shortfalls. He points to big downturns in three chief sectors of the state’s economy — aviation, agriculture and oil and gas.
Edward M. Eveld: 816-234-4442, @EEveld
Bryan Lowry of The Wichita Eagle contributed.
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