Let's Be Honest about Kansas Revenue, Please

There go the media-types again. They’re outside of Gov. Brownback’s office attempting to dig a hole deep enough to cover the sun.

Revenues in September were lower than anticipated again. Kansas collected $44.7 million less than anticipated. To hear the media sing it, Kansas is barely surviving. 

That’s simply not true. Kansas is spending more than we’ve ever spent before. Let that sink in. Despite record spending on just about everything, expectations are short.

This is a spending problem and this is a projection problem. It’s not a we’re-not-able-to-pay-our-bills problem.

The overblown projections are a problem, because we can’t plan if we can’t accurately (or at least closely) project future revenues. So where are revenues missing projections?

Primarily, the problem isn’t in income tax projections. Income taxes are $1.7 million above estimates for the fiscal year, and income tax revenues have grown almost 5 percent over last year. So when you hear people saying that income taxes are the problem, you are armed with this fact: Income tax revenues have grown by $25.4 million in the last year. The legislature cut incomes taxes for all Kansans in 2012, and revenues from those taxes are beating estimates.

Despite a sales tax increase in 2015, sales taxes aren’t keeping up with estimates. Sales taxes aren’t meeting expectations.

Here’s the other fly in the ointment, the legislature uses estimates when it adopts a budget. Even then, however, the legislature is under no obligation to SPEND to the last penny of estimates. Let’s say legislators are told a potential budget will have revenues of $10 million. (Kansas’ budget is much, much larger than that.) Legislators don’t have to name every dime. They could choose to spend only a percentage of that projected $10 million, but they don’t. They could choose to spend only $9 million or even $8 million, but they don’t. They always choose to pass a budget that spends almost every last dime.

Now, the Brownback Administration is working on creating a new way to estimate revenues. (The current estimating system is older than me.) The Consensus Revenue Estimating Group. Today, this group of bankers and accountants is going to make recommendations for a better process to estimate revenues.

As sure as I’m sitting here, so-called progressives are going to argue that we shouldn’t change that system. They are intellectually dishonest if they won’t even listen to the suggestions. We need accurate projections in order to create sound budgets, precisely because the legislature (and administration) is filled with people who love to spend other people’s money. That money they're itching to spend, taxpayers earned every cent of it. When legislators suggest they can just shake the old money tree, they intend to shake you down for more cash. Please keep that in mind.

In fiscal year 2016, revenues were 7.5 percent lower than projections. The problem isn’t the tax policy. The problem is how our budgets are crafted using an estimation process that’s older than the internet.