By JOHN HANNA
AP Political Writer 

Ripple from federal overhaul: Kansas sees $75M tax surplus

 

January 3, 2018



TOPEKA, Kan. (AP) — Kansas collected $75 million more in taxes than anticipated in December, and state officials said Tuesday the big surplus is tied to how Congress overhauled federal income tax laws.

The state Department of Revenue reported that Kansas collected $711 million in taxes last month, when its official fiscal forecast predicted $636 million, for a monthly surplus of 11.8 percent. It was the seventh consecutive month that tax collections have exceeded expectations.

Many legislators have been hoping that stronger-than-expected growth in revenues would help them in meeting a state Supreme Court mandate to increase spending on public schools. Lawmakers increased income taxes last year to help balance the state budget and provide extra dollars to schools, and there's bipartisan resistance to raising taxes again this year.

But Revenue Secretary Sam Williams warned that the December surplus resulted from some individuals making estimated personal income tax payments to the state earlier than normal. Starting next year, the federal deduction that people can claim for the state and local taxes they pay will be capped, giving them a reason not to wait until April to settle last year's state bill.


"I thought it could be an even bigger bubble, that's still a pretty big one," said House Taxation Committee Chairman Steven Johnson, a Republican from Assaria. "I think we've just gotten some of our April money in December."

The bubble creates an additional layer of uncertainty in the debate over boosting spending on public schools after lawmakers open their next annual session Monday. Lawmakers last year rolled back past income tax cuts championed by Republican Gov. Sam Brownback because of the state's budget woes.


The Supreme Court ruled in October that even after legislators phased in a $293 million increase in spending on schools over two years, the total annual aid to schools of $4.3 billion was not sufficient under the state constitution. The court hinted in its opinion that it could expect lawmakers to boost the figure by another $600 million a year.

Since the fiscal year began in July, tax collections have been a bright spot. At nearly $3.2 billion through December, they're almost $84 million ahead of expectations, or 2.7 percent — even after state officials issued a new, more optimistic fiscal forecast in November.

But Williams called the December surplus "simply a shift in the timing of tax payments."

"We truly will not know the effect of the state and federal tax policy until after the filing deadline in April," he said in a statement.

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

 

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