State revenue better than estimates, but it’s no match for bad tax policy
Emily Fetsch
March 3, 2021
This week is turnaround at the Kansas Legislature and the session is at its midpoint. No major tax bills have been enacted yet, but Kansas Action for Children is closely watching tax policy proposals in both chambers to see whether they will help or hurt Kansans in need as the state responds to the long list of needs exacerbated by COVID-19.
This week also marked the release of the February monthly revenue numbers, which reveals how Kansas is doing financially. Total taxes brought in so far this fiscal year are $5.43 billion, slightly above the estimate of $5.25 billion. Total receipts brought in for this fiscal year are $5.39 billion, slightly above the estimate of $5.19 billion.
For February 2021, total taxes were $456 million, above the estimate of $436 million, while the total receipts were $451 million compared with the anticipated $428 million.
Revenues are doing well, with total taxes performing 3.4 percent better than anticipated. However, the increase in revenue is not enough to protect us from a sledgehammer of a bill like Senate Bill 22 or House Bill 2421. These bills disproportionately benefit big business and higher-income Kansans, not low- and middle-income working Kansans. In addition, Senate Bill 22 would cost the state $490 million in the first year alone (Fiscal Year 2022).
A revenue reduction of this magnitude places the state in a precarious situation. We must fund Kansans’ education, health, environmental, and economic needs, but bills like these force a choice for lawmakers: budget cuts or enacting additional revenue-raising measures. And Kansas has firsthand experience with the damage caused by following up bad tax policy choices with budget cuts.
While the revenue coming into the state this year is above projections, it is not enough to pay for bad tax policy that could be passed this year and enacted next year. Kansas legislators need to consider revenue raisers, not tax cuts. At roughly the halfway mark of the session, we urge lawmakers to firmly reject the irresponsible mega tax bills shelling out money to those who need it the least. Instead, policymakers should recalibrate and place the needs of working Kansans at the center of their policy decisions.
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