State revenues end year $318 million higher than expected

State general fund tax revenues for Fiscal Year 2018, which ended June 30, were $317.8 million higher than the official estimates released in April, according to the Kansas Department of Revenue.

Based on an updated report from the Kansas Division of Budget, the increased revenue should result in an FY 2018 ending balance of $765.5 million, or 11.4 percent of approved expenditures of $6.691 billion. Under a provision in the state budget bill, if actual State General Fund revenues are above consensus estimates, then up to $56.0 million must be transferred from the State General Fund to the KPERS Trust Fund in FY 2018 and FY 2019.

The additional revenue should make it easier for the Legislature to address the Kansas Supreme Court’s Gannon decision, which basically approved the Legislature’s five-year plan to increase school funding by at least $522 million, but only if the Legislature provided a cost of living adjustment.

The actual revenue picture represents a dramatic turn-around for the Kansas state budget. In 2017, state general fund tax revenues were $5.817 billion. The 2017 Legislature passed SB 30, which reversed much of the 2012 state income tax cuts. That bill was expected to raise $591 million in 2018. In fact, actual 2018 tax revenues should end up at $7.031 billion, or $1.2 billion higher than 2018.

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