By Gene Meyer
TOPEKA, Kan. – Kansas general fund revenues beat their most recent estimates by more than $100 million last year, but hitting fiscal par may be tougher in 2012, state officials said Tuesday.
The Kansas Legislative Research Department, in a formal tally of state tax collections for 2011, reported that Kansas taxpayers paid $5.88 billion into the state general fund during the fiscal year that ended June 30, or about $107.2 million more than the state projected when legislators adjourned in May.
The taxes-only part of that total, which excludes interest earnings on state deposits and miscellaneous income such as drivers license fees, came to $5.69 billion, or about $99 million more than projected. Both totals are just less than 2 percent higher than in 2010.
Kansas revenue forecasters projected in June that both revenue numbers will increase another 2 percent to 3 percent this year, to just more than $5.8 billion in taxes only revenue and to $6 billion with the fee income, interest earnings and other miscellaneous general fund revenue included.
Reaching those expectations faces at least two challenges, however.
First, individual income tax collections, which were Kansas’ largest single tax revenue source in 2011, were unusally high last year because two presumably wealthy Kansas taxpayers cashed in millions of dollars of investments during the year to avoid what at the time seemed like a possible sharp increase in capital gains tax rates.
Those sales swelled individual state income tax collections significantly, though estimates vary widely. Steve Stotts, the Kansas Department of Revenue’s taxation director, calculates the one-time bump up to be, conservatively, about $46 million. Legislative Research director Alan Conroy, whose department prepared Tuesday’s report, estimates the impact to be nearer $60 million. And state budget director Steve Anderson, speaking at a Wichita political group luncheon recently, said it may be nearer $100 million.
One thing all three officials agree on, though, is that so far, no such windfall can be counted on again this year.
Second, although state sales tax collections, which are Kansas’ second largest source of general fund revenue, totaled $1.97 billion and topped year-earlier levels by 19 percent, they still came in $24.6 million, or 1.2 percent below projections, Tuesday’s report showed.
Virtually all that 19 percent increase during the year reflects an increase in basic state sales tax rates, to 6.3 percent from 5.3 percent, that kicked in July 1, 2010. Barring an unexpected surge in Kansas retail activity in the next 12 months, any similar sales tax revenue increase, which amounted to $329.5 million last year, seems unlikely this year, the report indicated.