Even with the COVID-19 pandemic still ongoing, state tax revenues are coming in leaps and bounds above original expectations.
According to a statement from Governor Laura Kelly Monday, the state brought in a total of $543.5 million in tax collections for the month of August. The total was 8.0 percent above original estimates and 9.3 percent higher than collections in August of the previous fiscal year.
With the state only two months into the 2021 fiscal year, Governor Kelly says this is a good sign that recent efforts to protect the state’s economy are working effectively.
17th District Senator and Senate Vice President Jeff Longbine of Emporia agreed with the governor’s statement to an extent. He says while he is pleased with the work done to beat fiscal expectations so far, there are a number of factors that need to occur to accommodate continued gains.
Longbine adds most of the sales tax revenues are being generated through compensated use tax — taxes paid on merchandise purchased from outside the state. He says this trend does bring about some concerns for the state’s retail condition and whether or not state businesses are generating effective numbers.
While the revenues are a positive sign, Governor Kelly did say that the state needs to remain fiscally cautious in the coming months as the state is still recovering from pandemic related impacts. When asked if he believes the current trends will continue for the foreseeable future, 60th District Representative Mark Schreiber of Emporia stated he was hesitant to provide a fiscal forecast given the pandemic’s uncertainty.
Both Schreiber and Longbine agree the state needs to identify its main priorities when it comes to spending over the next 10 months.
We have a copy of the governor’s news statement available below
State of Kansas Tax Collections $40.2 million Above Estimates
~Kansas total tax revenues show visible changes in consumer purchasing behaviors~
TOPEKA – Today Governor Laura Kelly announced that in its second month of Fiscal Year 2021, the State of Kansas continued to see total tax collections performing above estimates. Total tax collections for August were $543.5 million. That is $40.2 million, or 8.0%, more than the estimate. That is 9.3%, or $46.3 million, ahead of last August.
“While this news shows that the steps we have taken to protect our economy are working, we have to remain fiscally cautious,” Governor Laura Kelly said. “The state of Kansas is still recovering from COVID-19 and we have to stay vigilant. That means all Kansans should wear a mask, practice social distancing and avoid mass gatherings so we can keep our schools and our businesses open.”
August’s individual income tax collections were 12.9%, or $31.0 million, more than the estimate with $271.0 million collected. Compared to the same month last fiscal year, that is a 17.2%, or $39.7 million in growth. Corporate income tax collections were 10.5% more than August of last fiscal year with $7.3 million collected. That is $2.3 million, or 46.9%, more than the estimate.
Retail sales tax collections were 2.5%, or $5.1 million, more than the estimate with $207.1 million collected. That is a $1.8 million growth compared to the same month of last fiscal year. Compensating use tax collections were $12.7 million, or 38.9%, more than last August with $45.3 million collected. That is $9.3 million more than estimated.
So far, the state has collected $95.7 million in compensating use taxes for the fiscal year; a $24.0 million, or 33.6%, increase compared to the same two months of last fiscal year.
“The year-over-year increase in compensating use tax collections demonstrates the importance of increasing the number of registrations by remote sellers,” Secretary Mark Burghart said. “By increasing the number of out-of-state retailer registrations, we create fairness between out-of-state online retailers and main street Kansas.”
The state is $35.6 million, or 2.4%, ahead of projections for the year with $1.5 billion in total tax collections for the fiscal year. When comparing total tax collections over the same timeframe to the previous fiscal year, the State of Kansas is $531.0 million, or 53.5%, ahead of Fiscal Year 2020.
For a full breakdown of revenue numbers CLICK HERE.
