At the Rail - Good News or is it?

Martin Hawver

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There are times that news is good…but so little good that it really isn’t worth even Tweeting your friends about.

And that’s what happened last week when the Kansas Department of Revenue announced that the state took in $458 million in tax revenue for the month of November—$8.3 million more than predicted. That’s about 1.85% more than revenue experts had envisioned; if you left a 1.85% tip at the coffee shop, you’d never get a refill, would you?

So, good news, but really not worth crowding out those cats wearing red holiday hats on your friends’ phones.

Yet, for state government, it’s a start, and that’s $8.3 million that the state didn’t expect to have.

The issue is that the November windfall and another $108 million in additional revenue predicted for this fiscal year by the state’s Consensus Revenue Estimating Group of budget and economic experts still likely aren’t enough to constitutionally finance the state’s aid to public K-12 schools.

Remember, the Kansas Supreme Court has ruled that the new school finance formula passed by lawmakers last spring didn’t meet constitutional requirements to make sure that there is “adequate” revenue to schools to provide each child across the state access to a good education.

The court didn’t say how much more money the state needs to spend on schools—just more.

Chances are slim that November’s $8.3 million atop the $108 million predicted boost in revenue to be received by June 30 when this fiscal year ends will be enough to satisfy the court.

So, good news, but not enough good fiscal news to allow the state to avoid another tax increase to adequately finance schools or to cut spending on something else and transfer the money to schools or to figure out some way to overturn or emasculate the Supreme Court’s decision that the school finance plan in place now is unconstitutional.

New taxes on things that are exempt from taxation now? That’s going to be a tough one for lawmakers—especially House members who stand for re-election next year. It means not only finding new things to tax—and fighting with lobbyists who represent those untaxed businesses—but doing it quickly so the money starts rolling in by early spring.

Raising existing taxes? Well, last year it was income taxes that were boosted, and the year before that it was raising sales taxes. That doesn’t sound like a starter, does it?

Of course, there are still seven months left in this fiscal year, and it might turn out that the state has underestimated just how much money the retroactive income tax increase will raise and whether those limited liability companies and self-employed workers will pony up more money than expected after a four-year break from paying state income taxes.

But month-by-month as the Legislature meets to craft a new school aid proposal and a budget for everything else the state does with your tax dollars, the time clock ticks on that Supreme Court decision.

Back when lawmakers thought they had the school finance issue settled for this year and next, they hoped the upcoming session would be short, low-cost and generally agreeable to Kansans who will vote for their reelection next November.

Doesn’t look like that anymore. Nope, it’s looking like the little revenue boost the state enjoyed last month isn’t near what is going to be required and lawmakers are going to have to raise more money from somewhere…which means you.

Unless…and you gotta hope…that state revenues are going to unexpectedly climb to dig out of the budget hole facing the state.

Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver's Capitol Report—to learn more about this nonpartisan statewide political news service, visit the website at www.hawvernews.com