Kansas tax collections are $67 million below estimates in the first quarter of fiscal 2017 after falling $45 million under projections for September, the state's revenue department said on Monday.
Struggling with a structural imbalance, Kansas has turned to spending cuts and payment delays to patch its budgets, which have been feeling the effects of tax cuts in recent years.
Revenue officials said income, corporate and sales taxes all failed to meet September estimates.
"The significant contributors to less-than-expected September receipts were individual estimated payments related to capital gains and the stock market; a continued regional trend of low corporate tax receipts and sales tax receipts,” said Revenue Secretary Nick Jordan in a statement.
The state could face a big expenditure hit if the Kansas Supreme Court sides with school districts that are suing over inadequate funding. A ruling could come at any time.
Kansas spends about $4 billion on schools, but lawyers for the four districts suing the state claim another $430 million to $1.4 billion would be required to meet the state constitution's requirement for adequate funding.
Kansas' fiscal 2017 began on July 1.
(Reporting by Karen Pierog in Chicago; Editing by Matthew Lewis)