Even though income taxes were reduced on all individuals, General Fund tax revenue is still running well ahead of long term inflation. (Almost all state tax revenue goes to the General Fund, except for motor fuels tax and a portion of general sales tax transferred to the another fund.)
The adjacent chart compares General Fund tax revenue (actual through FY 2016 and estimated for 2017) with what tax revenue would have been if it increased for inflation each year since 1995.
In fact, tax revenue for FY 2017 is predicted to be $787 million higher than if it had increased for inflation since 1995.
Total General Fund tax revenue would be $111.9 billion between 1995 and 2017, and while the growth is well above inflation it’s not enough to keep up with spending of $115.4 billion. General Fund spending is now consistently above long term inflation by roughly $1 billion annually.
History shows that General Fund tax revenue exceeded spending in just ten of the last twenty-three years (including the budget year of FY 2017). An interesting pattern is seen in the adjacent table, with blocks of time where revenue exceeded spending is followed by several years of spending exceeding tax revenue.
Like many families, some states set money aside in a rainy day fund that can be accessed in recessionary times to avoid dramatic spending cuts as Kansas did in 2003 and 2010. Since Kansas does not have a rainy day fund, recessions and/or choices to overspend tax revenue have resulted in reserves being depleted and money being transferred from other funds over the course of many administrations in recent decades.