by KHI News Service
Topeka — A new report from the nonpartisan Rockefeller Institute of Government says that changes in federal tax policy are not the main cause of a steep drop in Kansas revenue collections.
The report says while the federal changes, which caused people to shift when they took capital gains, are the main cause of revenue declines in many states, Kansas and Alaska are exceptions.
“Twenty-nine states reported declines in overall tax collections, with Kansas and Alaska reporting the largest declines at 21.9 and 15.7 percent, respectively,” the report says. “The large declines in Alaska are mostly due to declines in oil and gas severance taxes, while the declines in Kansas are mostly attributable to legislative tax changes.”
At Gov. Sam Brownback’s urging, Kansas legislators cut income tax rates in 2012 and again 2013. When fully implemented in 2019, the cuts will have reduced the state’s top income tax rate by 40 percent and eliminated income taxes for the owners of more than 190,000 businesses.
The Rockefeller Institute report says that income tax collections in the second quarter of this year were down by 43 percent compared to the same period last year. That is the largest drop of any state.
The drop in revenue will lead to a budget shortfall of nearly $240 million by July of 2016 unless lawmakers cut spending in the current budget year, according to projections compiled by the nonpartisan Kansas Legislative Research Department.
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