Friday, October 24, 2014

Analyst: Tax policy change to blame for shortfall

By THe Herald Staff | 6/9/2014

A policy analyst said Kansas state officials misstated the cause of unexpected drops in tax revenues in April and May when the department cited the analyst’s research to dismiss the poor performance, according to the Wichita Eagle.

State tax revenues fell $93 million for the month of April and $217 million for the month of May, which put the state’s revenue estimates $310 million short for the fiscal year.

A policy analyst said Kansas state officials misstated the cause of unexpected drops in tax revenues in April and May when the department cited the analyst’s research to dismiss the poor performance, according to the Wichita Eagle.

State tax revenues fell $93 million for the month of April and $217 million for the month of May, which put the state’s revenue estimates $310 million short for the fiscal year.

While the state department believes the shortfall was caused by federal tax issues, Lucy Dadayan, a senior policy analyst with the Rockefeller Institute of Government, said the Revenue Department misrepresented her research about state tax revenue and that Kansas could be forced to make cuts in the near future, according to the report.

“The large declines in Kansas are mostly due to the legislated changes,” Dadayan’s Rockefeller Institute of Government report said. “The large declines in Delaware, Kansas, and North Dakota are mostly attributed to the legislative changes that cut income tax rates as well as restructured tax brackets.”

According to the Wichita Eagle, the Kansas Department of Revenue cited Dadayan’s report but neglected to use the information that claimed Brownback’s tax plan was the source of the shortfalls. Instead, the department blamed federal taxes and the capital gains issue created by the possibility of tax reform by President Obama.

“Kansas has been affected by this one-time 2013 tax year event. This is evidenced by a 47 percent drop in April and May payments attributed primarily to capital gains,” the Department of Revenue said, according to the report.

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