Track the Kansas Budget Crisis

(FY 2010, First Quarter: July – September 2009)

The Kansas 2010 budget is headed for a serious shortfall because of declining revenues. Two of the three most important revenue sources are down significantly through September 2009, and the third is on track to come up short, too.

Personal income tax collections were 5.8% less than a year ago and corporate income tax collections were down 28.7%. These are serious deficiencies that I warned about during FY2010 budget hearings in the last legislative session.

If Kansans finance their holiday seasons with credit, sales tax collections will fall beyond the 2.8% deficit they currently show from 2009 collections.

The FY2010 budget slump in Kansas shows a steep decline in revenues.

This is Why We Urged

Spending Cuts

In the last legislative session, I (along with most other House Republicans) urged deeper spending cuts because we were concerned about a long-term and worsening decline in revenue. The September 2009 revenue report has strengthened our dire concerns. Democrats in the Legislature painted a rosier budget picture, but the facts prove otherwise.

Third Quarter Shows Small Business Slump

September 2009 tax collections came in at 18.4% less than a year ago. This is especially important because personal income tax payments include quarterly payments from many small business owners, one of the largest drivers of the state economy.

Kansas Department of Revenue figures show September 2009 tax receipts were $67 million below expectations and $105 million below the previous year. For the first three months of the fiscal year, total tax revenues are $96 million below expectations and down $169 million from the first three months of 2009.

If the first three months of FY2010 are an indication, Kansas would end the year more than $500 million short of general fund tax collections according to calculations by the Kansas Institute for Public Policy.