Analysts: Kansas September tax collections increase not true sign of growth, recovery
(The Center Square) – Though Kansas’ September tax revenue collection was greater than anticipated, experts say that this instance does not point to economic growth, recovery or stability.
“Having more revenue than expected isn’t necessarily a sign of growth, especially when so much activity is temporarily propped up by government actions that will have long-term economic consequences,” Ganon Evans, policy manager and analyst at the Sandlian Center for Entrepreneurial Government at Kansas Policy Institute, told The Center Square. “Pre-pandemic, state tax collections per capital in Kansas were 42% above the national average, but the state had very weak growth.”
September total tax receipts were 22.7% above projections, 20.2% over September 2020 collections. According to the Topeka Capital-Journal, most of the additional revenue came from individual and corporate income tax collections and retail sales tax. Three months into fiscal year 2022, state tax collections are up 18.9% above the estimate.
Evans said that revenue continues to increase “because we’re taking too much out of taxpayer pockets. The surpluses are likely temporary because too many politicians see a surplus and start thinking about where they can spend it next.”
The Kansas business community also continues to be cautious about the state’s economy and its continuing recovery.
“In addition to state tax revenue growth, Kansas also should look at the number of private-sector jobs created and the state’s GDP growth. Kansas continues to set record revenues for the state, including an increase from $6.9 billion in FY ’20, to $7.9 billion in FY ’21,” Sherriene Jones-Sontag, vice president of communications at the Kansas Chamber, told The Center Square.
“I heard from a small business owner that this year only feels better because of how horrible last year was,” Evans said. “There is enough uncertainty around COVID itself, supply chains, inflation and other issues to make any optimism very provisional.”
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