Kansas revenues hit the skids in February, falling short of projections for the first time in several months. The Sunflower State collected $11.6 million less than anticipated in February, but revenues remain higher than estimates for the year.
Officials from the Kansas Department of Revenue suggested a delay in federal refunds for earned income tax credits and additional child credits may be to blame. Rather than paying those refunds in late-January or February, the refunds were paid out in March.
“Although withholding receipts grew $7.6 million compared to the prior year, that was offset by $12.3 million more in refunds paid out this month compared to March 2016, pulling individual income tax receipts below estimates,” said Department of Revenue Secretary Sam Williams.
Kansas Economic Fundamentals Strong
Michael Austin, a tax economist with the Kansas Department of Revenue, said the state is continuing to perform well.
“There are signs the economy is still improving,” Austin said. He said the monthly revenue report shows encouraging signs despite the projection miss.
“I wouldn’t get too hung up on this one month,” he said.
He cited increased withholdings as an example of positive signs for the Kansas economy.
“When withholdings go up, it’s usually because people are finding jobs or people’s wages are growing,” Austin said. “That means you’re seeing improving conditions in Kansas.”
In addition to increased withholdings, sales tax revenues beat projections. Williams said that’s encouraging.
“The March revenue receipts continue the trends we have seen over the last few months – withholding and state sales tax collections continue to improve, reflecting an encouraging job and consumer environment for Kansans,” Williams said.
Though revenues fell short of expectations in March, Austin noted that revenues are still $57.5 million higher than projections for the fiscal year.
“Even though revenues fell short for the month, the fundamentals show that the Kansas economy is still growing,” Austin said.