07 September 2021 | Tax and Budget

Sunny August revenues are the perfect time to start thinking about future rainy days

Kansas Action for Children
September 7, 2021

August total tax revenues continued to outperform estimates for the second month in this new fiscal year and again exceeded pre-pandemic levels. Total receipts were $616 million, 23.4 percent or $117 million higher than projected, while the total taxes came in 22.0 percent higher than estimates at $629 million.


The month’s total tax collections were higher than previous Augusts. This month’s tax collections were 15.7 percent higher than August 2020 and 26.5 percent higher than pre-pandemic August 2019.

Both individual and corporate income taxes bested August estimates by an additional $82.3 million and $7.2 million, respectively. The individual income tax collection of $302.3 million was also 11.6 percent higher than August of last year and 30.7 percent higher than August 2019. Similarly, corporate income tax brought in $17.2 million, about 2.5 times higher than collections in the two Augusts prior.

Stronger-than-expected revenues is a sign that Kansas is headed in the right direction economically; however, past recessions and the spread of the Delta variant remind us how quickly things can change. There is no better time than now for Kansas to begin preparations to improve the state’s rainy day fund and assertively invest in and utilize it as intended.

The Budget Stabilization Fund (the “rainy day fund”) was designed to receive half of any excess revenue the state receives (after the state’s 7.5 percent ending balance is achieved). Unfortunately, the Fund currently sits empty due to years of circumventing best practices regarding fund deposits, withdrawals, and replenishment in anticipation of low tax revenue receipts. As the state sees strong monthly revenue intake, it is time to commit to funding the rainy day fund in a first step toward responsible fiscal management.

A strong rainy day fund is the fiscally responsible choice. By securing excess resources now, the state will be better poised to retain workers and maintain levels of service for programs crucial to Kansans during future downturns. With certainty about the future feeling shaky as the COVID-19 Delta variant continues to disrupt industries, schools, and communities, failure to responsibly invest in the rainy day fund is a gamble that will have a detrimental impact on the most vulnerable Kansans. We can and should do better.

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