Saturday, September 18

Ron Estes: Tell whole story on state finances

Kansas State Treasurer Ron Estes:

Edward Flentje left off part of the story on the state finances (March 9 Opinion). …

Now let’s look forward for the next two to three years. In 2012, the same Senate that had voted for the 1-cent sales tax passed an income-tax cut that Brownback ultimately signed. That bill cut income-tax rates starting in January 2013 with the intention of lowering income taxes to jump-start business investment and consumer spending. Ultimately, the goal was that after three to four years, tax receipts would grow larger than with the old, higher income-tax rates.

The state’s economy had stopped declining by 2010 and was showing signs of some small growth, but not enough. In 2013, with the lower income-tax rates, the Kansas economy was exhibiting more growth. In fact, the fiscal year 2013 ending balance in June 2013 was $764 million, which was $90 million more than forecast.

Some of the $90 million was due to the federal fiscal cliff, which led to a lump sum of money that will not be repeated. But actual tax receipts were also higher than estimated based on the size of the income-tax cuts.

As I mentioned, we are seeing some growth in the state’s economy. However, we need to see more. We started fiscal year 2014 with $764 million, and the income-tax reduction plan was to spend down that balance until the economic growth raises tax revenue back.

I am cautiously optimistic the economic-growth plan will work for Kansas, but I will continue to watch the state’s account balance over the next two years.

No one wants to ensure we have enough money in the state’s checkbook more than I do. My name is on every check, and I don’t want any to bounce.