The end of March gives us a chance to evaluate the first three quarters of Kansas’ fiscal year. With all that has happened in the last year, we have not been very certain of how tax revenues would fare for the state.

Thanks to everyone’s work (and spending) the revenues have continued to stay strong.

Year-to-date tax receipts for the state’s general fund are 4 percent above the estimate and 14 percent over last year’s receipts. That amounts to an additional $200 million received so far this year above what we had planned.

With our unemployment rate well below the national average at 3.2 percent, strong current grain prices and federal stimulus money coming into our economy, the outlook for Kansas’ next quarter remains positive.

While the revenue news is positive, our expenses are growing faster than projected revenue. This is depleting the ending balance built from closing the LLC income tax exemption in 2017.

We have one more sizeable increase in school spending from the Gannon lawsuit next year. In addition, the appropriations committee added over $100 million to shore up needs in areas including mental health and higher education. The committee position was cut by 2 percent on the House floor and passed on to the Senate.

The House tax bill has some positive elements for many taxpayers. The cumulative value of those cuts would reduce tax revenue by $100 million.

The bill reduces income tax for several payers.

It would create an option to itemize deductions for Kansas filers who take the federal standard deduction as well as increase the state standard deduction.

Businesses would be able to subtract several items from their income, including certain international income, business interest, FDIC premiums, capital contributions and meal expenses.

On the revenue positive side, it adds sales taxes on internet sales to level the playing field with our in-state businesses.

While neither the budget or tax bills are final, the projections show spending well above revenue received next year.

Several major bills were up for debate on the floor. The K-12 Education Budget committee brought a bill that fully funds K-12 as prescribed in the Gannon lawsuit and adds several policy initiatives.

The most controversial policy would create Education Savings Accounts (ESA’s). An ESA could be established for students who are defined as “at risk” by the school and who fall in the lowest 25 percent of performance on standardized tests.

If the student chooses to attend an accredited school other than their public school, they could use the account to pay education related expenses.

The state would contribute an amount equal to the base aid (with no additional weightings) to the student’s account. In the first three years of the program, public schools would be held harmless. The state treasurer would be responsible for the accounts.

While I like to consider ideas that could help raise the performance of any of our students, I am not certain of the mechanics of the accounts and several other issues. The bill narrowly advanced out of the house with assurances these and other concerns would be addressed. As a House position, it will be the starting point for education funding negotiations with the Senate.

Thanks for your calls and e-mails. I have learned about the Kansas Nebraska Heritage Area Partnership from those calls and am learning more about it with you. We will finish the general session this week and I look forward to spending more time at home and at events in our district.

Have a great week!