Despite ‘sky is falling’ claims from high tax / big government proponents, the new Kansas revenue estimates show that tax revenue will continue to be well ahead of the inflation-adjusted historic trend.
Tax revenue increased by 28.4 percent over the last ten year, or 4 points more than the increase in inflation (Midwest Urban Cities calculated on a fiscal year basis). The April 2015 Consensus Revenue Estimates put total General Fund tax revenue at $5.743 billion this year and growing to $6.025 billion over the next two years.
Inflation would be 29.2 percent higher in FY 2017 than in FY 2004 if it continues at last year’s pace, but tax revenue would be 37.3 percent higher.
The new revenue estimates are slightly lower but the reasons are perfectly understandable. Corporate income tax receipts are 6.2 percent higher for the first nine month of the current year but estimates were reduced because the November estimate predicted even higher growth. Retail sales tax receipts were also higher than the previous year but not as much as hoped and the severance tax estimate was lowered since collections are off as a result of lower oil prices.
Tax revenue might not be growing fast enough to keep up with legislators’ desire to increase spending but the gap between actual growth and inflation continues to widen. That is a spending problem…not a revenue problem.