(Corrected to show that ending balance reflects the tax bill passed by the Legislature)
State revenue forecasters on Thursday added $237.5 million to the revenue picture over two years with the state still tracking estimates made last fall.
The new revenue estimates for the spring were increased by $128.2 million, or 1.3%, from last fall for the current fiscal year ending this June 30.
The estimates for fiscal year 2024 were boosted $109.3 million, or 1.1%, from the estimate projected last fall.
The state is now expected to raise about $10.1 billion in taxes this year and about $10.2 billion in 2024.
“These revenue estimates show that Gov. Kelly’s laser-sharp focus on growing the economy and landing new business deals is paying off,” said Brianna Johnson, the governor’s spokesperson.
“Now, Kansas can continue balancing its budget, fully funding schools, and passing responsible tax cuts – all while increasing funding for special education,” Johnson said.
As of Thursday, the state was projected to have an ending balance of about $1.9 billion at the end of the current fiscal year and $3 billion the following year.
The ending balance includes a proposal cutting taxes passed by the Legislature.
The Legislature passed a bill that would cut taxes by $302.7 million in fiscal year 2024, when the state is estimated now to have a $3 billion surplus.
The bill cuts taxes in $569.3 million in 2025 and $480.8 million in 2026.
The bill, now on the governor’s desk, would move the state to a 5.15% flat tax, increase the standard deduction based on inflation, cut taxes on Social Security income while eliminating the sales tax on groceries starting this January.
House Speaker Dan Hawkins said the new estimates justify tax cuts.
“The Legislature passed a tax plan that is both sustainable and provides tax relief for all Kansans,” Hawkins said in a statement.
“The updated revenue estimate just makes it more of a no brainer,” he said.
Adam Proffitt, the state’s budget director, wouldn’t directly address whether the new budget numbers make the tax plan affordable.
He said the tax bill is on the governor’s desk awaiting action.
The administration started the legislative session “looking across the horizon and making sure we have a structural balance across time,” Proffitt said.
Proffitt emphasized that estimates released Thursday reflect only one point in time.
“The governor has always been focused on looking across the horizon and she wants to have structural balance for years to come so we don’t find ourselves in a hole,” he said.
“It’s philosophically where she’s always been,” he said.
In her statement, Johnson cautioned about the future.
“It’s important to note that this is only an estimate of revenues for the next two years and doesn’t include the impacts of potential unforeseen events,” she said.
“Legislators must continue working together to pass common sense, fiscally responsible policies that don’t throw the budget out of balance long-term.”
