One month does not a crisis make, but officials certainly should be concerned that state tax collections in May were $51 million less than expected. If the decline in revenue continues, the state may need to revisit and cut its budget, including education spending. State revenue estimators have been somewhat optimistic, projecting that strong markets in aviation, agriculture and oil and gas would insulate the state from much of the national economic downturn. But that may prove to be wishful thinking.
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8 Comments
Stron market in aviation? Who are they kidding?! With airlines going bankrupt how are they going to buy aircraft?
BOTH of the big liquid-fuel users – cars and airplanes – will see reduced demand as they are driven/flown less. Fleets will be maintained longer and replaced less frequently. So, BOTH of these industries will see reduced demand.
The only hope for both of them is international demand – but there they must compete even more with overseas suppliers. Also, the “domestic” (sic) companies are setting up plant overseas near those markets.
Boeing used to be a Wichita/Seattle company. Where is it headquartered now? CHICAGO. An international center; not really a domestic center.
ag will help some but will suffer due to hign energy/fertilyzer costs. It will also suffer from water issues and “drought” in western KS.
Oil/gas may be the bright spot – IF they can find new reserves in the state. That is a big IF.
The state legislators always wear rose colored glasses and hope for the best, then when they hose things, it’s not their fault.
…”state tax collections in May were $51 million less than expected.”
Perhaps they should fire the person who made the lousy estimate.
I wonder if it is wise to use University economists who have a vested interest in seeing larger revenues so they can project out a larger piece of the pie for their respective schools in the budget?
It’s analogous to applying for a car loan and saying “I might get a pay raise in the next six months.”
Wishful thinking should never been part of budget planning. You pay for budgets with what you have, not what you might get. That’s why they call them budgets
maybe all the tax breaks given to businesses over the last six years has something to do with this?
Who’s surprised that the rosy estimates were used to justify businesses getting those tax breaks?
And who’s surprised the chickens are coming home to roost?
Ag producers pay no sales tax on ag related purchases. They may pay more in income tax, but I doubt it, given the way their expenses are rising, there wont be as much profit on paper as one might expect.
And if that isnt enough to zero out their tax liabilities, they’ll buy new equipment and build new buildings and such to make SURE their “expenses” are greater than their revenues.
Hey, it’s the american way, right?
maybe the state shouldnt be giving out 25 million dollar handouts to cessana then, or the 5 million to airtran
The obvious answer is for the state government to drastically reduce spending. That should be the immediate priority of our Kansas executive branch and state legislature as unfun as it might be.
And I predict the same trends will affect our city, county and school units of government even though tax dollars come from various other sources.
Also immediately stop construction of the unwanted, unneeded downtown arena and return the unspent sales tax money, if any, to Sedgwick County taxpayers.