April 20 Kansas on Thursday increased tax
revenue estimates for the current fiscal year as well as the
next two by a total of $156.4 million from a previous November
projection as the state struggles with budget deficits.
For fiscal 2017, which ends June 30, the estimate was
boosted by $62.5 million, while projections increased by $42.9
million for fiscal 2018 and $51 million for fiscal 2019. Reasons
for the rosier outlook were not immediately available from
Governor Sam Brownback's office.
Tax cuts enacted in 2012 have gouged a hole in the Kansas
state budget. After months of falling short of estimates, tax
revenue met or exceeded projections between November and
February, before slipping below estimates in March.
Brownback on Tuesday signed into law a bill that plugs a
$280 million hole in the state's current budget largely by
borrowing money from a state investment fund.
The measure, which passed the Kansas legislature on April 6,
taps $317 million in unclaimed property fund money held by the
Kansas Public Employees Retirement System. The money, which will
be transferred to the state's general fund over two years, would
be returned over six years beginning in fiscal 2019.
Prior to the new revenue estimate, the budget gap for the
next two fiscal years was pegged at about $1 billion.
A move in the state legislature earlier this year to
increase revenue by raising tax rates and eliminating a business
exemption failed when the Senate was unable to override the
Republican governor's veto.
Complicating the state's finances is a March 2 state Supreme
Court ruling that found the school funding system falls short of
a constitutional requirement for adequacy. The ruling, which set
a June 30 deadline for the enactment of a constitutional funding
method, could require Kansas to increase school funding by more
than $500 million each year.
Moody's Investors Service and S&P Global Ratings have said
the ruling will put increased pressure on the state's already
(Reporting by Karen Pierog, editing by G Crosse)