23 April 2024 | Tax and Budget

Recent Estimates Show Decrease in Budget Forecast

Alice Fitzgerald | April 23, 2024

The Consensus Revenue Estimating Group released its newest estimates late last week. The CRE Group’s forecast shows what’s behind those numbers and what we can expect for Kansas’ current financial picture.

Learn how the estimating process works

Some of the key takeaways from the report include:

  • State revenues are still healthy despite several consecutive months of lower-than-anticipated revenues.

  • State General Fund (SGF) receipts for FY 2024 are projected at $10.183 billion, which is a decrease of $119.3 million from the November estimate. This may be a result of the less-than-ideal revenues in nearly every month since the November 2023 estimate was released. Still, though, the state is expected to end the current fiscal year with a surplus of $2.7 billion.

  • The forecast increased the estimate for FY 2025 by $146.2 million, totaling an expected $10.404 billion in revenue. The state predicts it will have a $1.9 billion surplus at the end of FY 2025.

  • The state’s economic well-being is still considered stable but is slightly more volatile than projected in the November CRE.

  • The FY 2025 revenue increase is attributable to a delay in implementing a corporate tax cut.

What the Forecast Does — and Doesn’t — Tell Us

The purpose of the forecast is to project surpluses or deficits based on the state’s current and future budget commitments, while adjusting for external variables (like a national or even global recession) that could affect the state’s revenue outlook.

As we near the end of FY 2024, the expected $2.7 billion surplus demonstrates fiscal stability in the state. The CRE Group explained the decrease in the overall FY 2024 revenue estimate is due to lower collections over the past several months rather than the expectation that the next three months will be lower than predicted. When April’s collections are totaled (which is typically a strong month given tax deadlines), we are likely to have a better idea of the estimator’s’ accuracy.

Though the FY 2025 estimate is higher than November’s estimate, this is not indicative of any additional revenue growth. Speculation abounds as to whether this modest adjustment will impact the Governor’s coming decision to veto the Legislature’s most recent tax plan in Senate Sub. for HB 2036.

After the state releases a more in-depth picture of the April 2024 CRE, more details on Kansas’ economic profile will emerge.

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