Kansas revenues 10% above estimates for first two months of new fiscal year

TOPEKA — Kansas tax collections trended upward in the first two months of fiscal year 2027 coming in 6.5% above estimates, the state reported. 

Total Kansas receipts, including taxes and other revenue, such as interest, for July and August were $113.9 million, or 10% above estimates, according to a report Tuesday by the Kansas Legislative Research Department. 

Individual income tax receipts were above the estimate by $64.1 million, or 8.7%, the report said.

Corporation taxes, however, continued to come in below estimates, down by 10.9%, or $4.4 million, for July and August. 

“However, corporation income tax receipts were more in line with the prior-year amount, only lagging the year-to-date level by 1.3%,” the KLRD report said.  

Kansas real gross domestic product, which measures the market value of all final goods and services, increased by 1%, making Kansas GDP growth up 3.8% on average for the last four quarters. 

“Contrary to the national level, government spending, especially military spending, was a large contributor to the growth of the Kansas economy,” the KLRD report said. “Among private industries, manufacturing of both durable and non-durable goods contributed positive growth, which was partially offset by declines in agriculture and retail trade.”

Kansas House Majority Leader Chris Croft, an Overland Park Republican, attributed the positive financial report to reduced spending. 

“These numbers reflect the Legislature’s balanced policies of restraining spending and responsible tax relief,” he said in a news release. 

The state general fund budget for fiscal year 2027 is $10.7 billion, while the estimated revenue is $10.1 billion, according to KLRD’s website. The total state budget for the same period is $26.77 billion. 

Inflation was at 3.9% nationwide and 4.3% in the Midwest, while the unemployment rate dropped from 3.9% in the second quarter after sitting at 3.9% the previous quarter, the KLRD report said. 

“These were the highest levels of inflation since the second quarter of 2023,” the report said.