TOPEKA — A month of softness in state revenue from corporate income tax and retail sales tax led Gov. Laura Kelly to urge the 2026 Kansas Legislature to take a cautionary approach to managing the state’s finances.
Kelly, a Democrat approaching the final year of her second term as governor, responded to the November revenue report Monday by asking the Republican-controlled Legislature to be judicious as it worked to craft the new state government budget.
“November’s tax collections were nearly on target overall,” Kelly said. “While individual income tax collections were up, corporate income tax collections were again below estimates and significantly below November 2024 levels.”
The Kansas Department of Revenue’s report offered a snapshot of where Kansas stood five months into the current fiscal year compared to the initial five months of last fiscal year.
She said the state collected this fiscal year $74 million less in corporate income tax than last fiscal year. In addition, retail sales tax revenue slipped by $53 million in a year-to-year comparison.
The state’s bottom line, however, stayed in positive territory for the fiscal year because individual income tax collections surged by $173 million, or 9.9%, above last year’s performance at this juncture. Overall, considering all sources of state tax revenue, Kansas sits $58 million above the five-month total reported through November 2024.
“As I develop my next budget proposal I am not considering just fiscal year 2027. I am also looking on to the out-years to keep our state on solid financial footing,” Kelly said.
She said Kansas was on pace to erode a $3 billion cash reserve by spending $300 million to $700 million more annually than collected in taxes.
In the past, Kansas House Speaker Dan Hawkins, R-Wichita, said the governor was fond of “grandstanding” when speaking about state budget issues. He said Republican lawmakers were committed to showing Kansans “results that can be achieved with level-headed and carefully crafted policy.”
Kansas governors submit to the Legislature in January of each year a constitutionally balanced budget for consideration by the House and Senate.
The Republican-controlled Legislature — as it did in 2024 — has been working on an alternative budget bill. The House-Senate budget committee scheduled two days of meetings next week to hammer out details of its outline for the fiscal year starting July 1, 2026.
Copyright 2025 High Plains Public Radio
This story was originally published by the Kansas Reflector.
