State revenue surges $101 million in April

The unexpected increased in individual income tax collections added fuel to political debate about responsible tax reform.


State News

May 2, 2024 - 2:09 PM

Gov. Laura Kelly and House Speaker Dan Hawkins tangled again on the shape of property, sales and income tax reform after state officials reported Kansas tax revenue in April surpassed the monthly estimate by $101 million and added to the state's robust cash surplus. Photo by (Tim Carpenter/Kansas Reflector).

TOPEKA — An unexpected surge in individual income tax collections in April drove Kansas state revenue $101 million higher than projected for the month, state officials said, and added fuel to political debate about what constituted responsible tax reform.

The report led House Speaker Dan Hawkins, R-Wichita, to call on Democratic Gov. Laura Kelly to sign the Kansas Legislature’s latest package of income, sales and property tax overhaul bill.

Kelly’s staff indicated she would veto the bill and call a special session of the Legislature to concentrate on an alternative to the five-year, $2.3 billion package adopted by the Legislature before adjourning Wednesday. Before the ink was dry on that bill, both Republican and Democratic state legislators shared the view it was dead on arrival.

The Kansas Department of Revenue reported tax collections for state government in April totaled $1.42 billion. That was $101 million, or 7.7%, above the monthly consensus projection by the state’s economic, budget and revenue analysts. The uptick in April surpassed by 9.6% the total tax revenue in April 2023.

“These revenue numbers underscore how important it is to provide responsible tax relief now,” Kelly said. “I remain committed to cutting taxes in a fiscally responsible, comprehensive manner that doesn’t jeopardize the progress we’ve made.”

Hawkins, the Republican leader of the Kansas House, said the state continued to build, at an “unprecedented level,” cash reserves that ought to be returned to taxpayers.

“The economic outlook is positive,” Hawkins said. “No more excuses. No more games. Governor, sign the bill. Give the people of Kanas the bipartisan tax relief they deserve.”

In April, Kelly vetoed House Bill 2036 because the tax revenue reductions carried forward would deplete the state treasury in a manner reminiscent of the aggressive state income tax cuts signed in 2012 and 2013 by then-Gov. Sam Brownback that ended up crippling the state’s budget for years before repealed.

“I have said repeatedly that I will do everything in my power to prevent our state from the fiscal mismanagement of the previous administration,” Kelly said.

The Kansas Senate fell one vote short of overriding Kelly’s veto of that bill, which would have created a two-bracket state income tax system, eliminated the state’s 2% sales tax on food by July 1, exempted Social Security benefits from state income tax, raised the standard deduction on income tax returns and elevated the residential property tax emption on the statewide mill levy.

In January, Kelly vetoed a tax reduction bill approved by the Legislature that would have imposed a single-rate state income tax that she considered “reckless.” She said House Bill 2284 would “take us back to Brownback while doing next to nothing for the middle class. This flat tax experiment would overwhelmingly benefit the super wealthy.”

Mark Burghart, secretary of the state Department of Revenue, said individual income tax collections were $740.3 million in April. That meant revenue from that source was $91 million, or 14%, more than anticipated. It was 24.7% greater than individual income tax revenue gathered in April 2023.

“The overage for April is largely due to the fact that we are processing 63,000 more ‘balance due’ checks from taxpayers this year than we were at the same time last year,” Burghart said. “A combination of two additional processing days and recently upgraded check remittance technology at the Department of Revenue have allowed payments to be processed faster and much more efficiently.”

He said tax receipts in May would “likely be lower than the estimate” because the April tally captured payments that would normally have processed in May.

In April, state corporate income tax collections were $338.2 million in excess of the estimate. That was $6.3 million or 1.9% more than expected. However, the April total was 4.5% less than in April of last year. State retail sales tax receipts were $295.1 million in April — $3.1 million or 1.1% more than the estimate, but a decline of $13.5 million or 4.4% from April 2023.