Report: Effects of Kansas tax cuts 'understated' DOH!

TOPEKA, Kan. (AP) -- Kansas appears to have understated the effects of tax cuts championed by Republican Gov. Sam Brownback in projecting revenues, the Legislature's nonpartisan research staff said Tuesday in a report that reignited a sharp debate over how the governor's aides have explained recent revenue shortfalls.

State tax collections in April and May fell a total of $310 million short of the state's most recent official revenue projections, which are used to set budgets. Secretary Nick Jordan stood by the state Department of Revenue's assessment that the shortfalls are tied primarily to past disputes in Washington over federal tax and spending policies that led investors to avoid claiming capital gains in 2013, fearing higher federal taxes on them.

Democrats have argued that most of the blame lies with personal income tax cuts approved in Kansas in 2012 and 2013 by the Republican-dominated Legislature at Brownback's urging. The governor contends the cuts are spurring economic growth and creating jobs, but Democrats argue the reductions were reckless and will starve public schools and government programs of needed funds.

Also, if the state continues to collect less revenue than anticipated in coming months, it could face a projected budget shortfall that legislators would have to close next year, possibly by trimming spending they approved this year.

The Kansas Legislative Research Department's report Tuesday was its monthly update on revenues, and it acknowledged the capital gains issue raised by the Department of Revenue as a factor in the April and May tax collection shortfalls. But it also said, "it appears some of the fiscal notes (estimates) associated with various income tax law changes enacted in 2012 and 2013 were understated."

http://finance.yahoo.com/news/report-effects-kansas-tax-cuts-144446626.html