Lower Gas Prices Mean Lower Kansas Tax Collections
The recent drop in oil prices is translating into fewer tax dollars collected by the state of Kansas.
State lawmakers are already facing budget deficits reaching hundreds of millions of dollars.
Stephen Koranda reports on the "severance tax" that oil producers pay based on the price of crude oil.
When economists met in November to create a new revenue estimate for Kansas, they used a crude oil price of $80 per barrel.
“Eighty dollars a barrel? If we were doing that today, why you’d laugh us out of the room,” says Chris Courtwright, with the Kansas Legislative Research Department.
He says tax collections will be down because oil is now nearing $40 a barrel.
But he told a legislative committee that consumers now have more money to spend on things other than gas, which could help sales tax collections.
“Let’s keep our fingers crossed that there’s going to be some good news on the sales tax front,” says Courtwright.
Courtwright says oil-related tax collections could be down by tens of millions of dollars, but we won’t know for several months.