TOPEKA, Kan. (AP) — Kansas expects to lose a total of $360 million in tax revenues over three years because of a change in federal policies on COVID-19 relief for businesses, complicating legislative debates over state spending and cutting income taxes.
The disclosure of the state’s expected loss is a cloud in what for months has otherwise been a sunny fiscal picture, with tax collections exceeding expectations and the unemployment rate back to lows seen before the coronavirus pandemic. The disclosure this week came as Republicans pushed a bill cutting income taxes through the GOP-controlled Legislature.
The expected loss was outlined in a short memo to six legislative leaders from Mark Burghart, the state Department of Revenue’s top administrator, and Adam Proffitt, budget director for Democratic Gov. Laura Kelly. The memo noted that relief legislation approved in December by Congress created a new income tax deduction for businesses that received federal Paycheck Protection Program loans.