For June 2022, Kansas tax revenue was 7.5 percent greater than June 2021. Collections for the entire 2022 fiscal year are 9.5 percent greater than the prior year.
Tax reports from the State of Kansas for June 2022 show tax revenues rising slightly from the previous month and also more than the same month the prior year.
When reporting on Kansas tax collections, the comparison is usually to the estimated tax collections. Those estimates are revised based on economic conditions. To get a feel for the effects of the Kansas economy and state tax policy, we should compare to the same month the prior year. (The estimated revenue figures are still important because the state bases the budget on them. If the actual revenue is below the estimated revenue, there may not be enough income to pay expenses.)
For June 2022, individual income tax collections were $364.7 million, down by 2.1 percent from last June. Retail sales tax collections rose by 7.8 percent to $241.8 million from last June. Total tax collections were $918.8 million, up 7.5 percent from last June. Table 1 summarizes. (Click charts and tables for larger versions.)
In its presentation of this data in May, Kansas Legislative Research noted this regarding retail sales tax collections: “The increase was primarily driven by the impact of inflation on prices.” Inflation is still high.
For fiscal year 2022, which started on July 1, 2021 and ends with June 2022, total tax collections are higher by 9.5 percent over the previous fiscal year. Table 2 shows these figures.
Kansas tax revenues continue to outperform estimates. When the line is above zero in nearby chart 5a, actual revenue was greater than the estimate, and the line is nearly always positive for the past five years or so. Estimates are essential because the legislature uses them to make spending decisions. Beyond that, the variance between actual revenue and the estimate doesn’t have much meaning. The governor uses a positive variance as a sign of economic success, remarking in her press release: “In June, we brought in more money than was estimated — re-enforcing that our state’s economy is continuing its forward momentum.” But this is incorrect. It just as easily means the estimates are wrong, possibly for reasons other than the inherent difficulties of making estimates.
Over the past five or so years, revenues have exceeded estimates, sometimes by large margins. Chart 5b shows the cumulative variance for each fiscal year, with a positive number meaning actual collections were greater than estimated. The trend of positive variances starting with fiscal year 2018 is distinct. This chart does not show total collections and does not illustrate the health of the Kansas economy. It simply compares estimates to actuals.
I have updated my interactive visualization of Kansas tax revenue with this data. Click here to use it.
This month saw large fund transfers. See my report from last month for details. This month, $219.1 million was transferred to the budget stabilization fund. (1)“Current law states that 50 percent of the SGF taxes only receipts above the April consensus revenue estimate, adjusted for legislation, must be transferred to the Budget Stabilization Fund. The total SGF receipts includes the reduction of $219.1 million that was transferred to satisfy current law.” Kansas Legislative Research, report for June 2022.
|↑1||“Current law states that 50 percent of the SGF taxes only receipts above the April consensus revenue estimate, adjusted for legislation, must be transferred to the Budget Stabilization Fund. The total SGF receipts includes the reduction of $219.1 million that was transferred to satisfy current law.” Kansas Legislative Research, report for June 2022.|