Kansas tax revenue surpasses first quarter estimate by $108 million

    Gov. Laura Kelly said the $108 million in unexpected state tax revenue during the first quarter of the current fiscal year doesn't alleviate the need to be frugal in anticipation of future budget problems exacerbated by COVID-19. (Sherman Smith/Kansas Reflector)
    Gov. Laura Kelly said the $108 million in unexpected state tax revenue during the first quarter of the current fiscal year doesn't alleviate the need to be frugal in anticipation of future budget problems exacerbated by COVID-19. (Sherman Smith/Kansas Reflector)

    TOPEKA — The state of Kansas collected $108 million more in tax revenue than anticipated in the first quarter of the current fiscal year, officials said Thursday.

    Gov. Laura Kelly said the three-month accumulation of cash shouldn’t divert attention from the need to be financially frugal. She said concern persists about estimates of future revenue shortfalls and unpredictability of the COVID-19 pandemic.

    “We must remain committed to fiscal steadiness, public health and support our core services like education, infrastructure and economic development, which will enable Kansas to remain on the path to recovery,” Kelly said.

    The Kansas Department of Revenue took in $108.4 million more in July, August and September than predicted by members of the Consensus Revenue Estimating Group. These analysts, economists and others are responsible for outlining economic trends relied upon by the governor and Legislature when revising the state budget and developing plans for the upcoming fiscal year.

    Overall, Kansas has taken in $2.3 billion in taxes during the fiscal year. That’s $515 million, or 29%, more than in the first quarter of last fiscal year. The surge is due primarily to a COVID-19 decision to extend the 2019 state income tax filing deadline to July 15 — two weeks into the current fiscal year. That led to unusual inflation of revenue on the current fiscal year’s ledger.

    In September, the state collected $728 million in taxes to surpass the monthly target estimate by $72 million. Last fiscal year, Kansas took in $15 million more in tax revenue during the month of September.

    Retail sales tax collections in Kansas during September were $2.4 million, or 1.2%, less than projected at $195 million. Kansas officials speculated it might be attributable to the delayed start of K-12 public schools. However, the state’s haul from the compensating use tax applied to merchandise purchased from other states surpassed the goal by 34% to reach $45 million for the month.

    “The impact that the pandemic will have on the economy during the fall and winter months is uncertain at best,” said Mark Burghart, secretary at the state Department of Revenue. “That same uncertainty carries over to the anticipated sales and use tax receipts associated with purchases that will be made during the upcoming holiday season.”

    Kansas individual income tax and corporate income tax collections during September performed better than expected. There was a 7% increase in individual income tax revenue, with the additional $23 million pushing the monthly total to $358 million. Corporate income tax collections were $89 million, an increase of $29 million or 49%, above the estimate.

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    Tim Carpenter
    Tim Carpenter has reported on Kansas for 35 years. He covered the Capitol for 16 years at the Topeka Capital-Journal and previously worked for the Lawrence Journal-World and United Press International. He has been recognized for investigative reporting on Kansas government and politics. He won the Kansas Press Association's Victor Murdock Award six times. The William Allen White Foundation honored him four times with its Burton Marvin News Enterprise Award. The Kansas City Press Club twice presented him its Journalist of the Year Award and more recently its Lifetime Achievement Award. He earned an agriculture degree at Kansas State University and grew up on a small dairy and beef cattle farm in Missouri. He is an amateur woodworker and drives Studebaker cars.