State faces $328 million budget hole

Official projections of state revenues in coming months paint challenging picture for policymakers

0 | Budget, Agencies

— Kansas policymakers can expect a $328 million budget shortfall in the coming fiscal year, according to new revenue projections released today by the state's official revenue estimating panel.

That means the 2013 Kansas Legislature after it convenes in January must significantly cut spending and/or raise taxes in order to meet the constitutional mandate of maintaining a balanced budget for the fiscal year that begins July 1.

State general fund revenues over the next 18 months are expected to drop more than $1 billion, mostly as a result of the biggest tax cut in state history.

The income tax reductions were approved by Gov. Sam Brownback and the 2012 Legislature but are not effective until Jan. 1. The scheduled rollback of a sales tax increase approved in 2010 also is a factor expected to decrease the amount of money the state takes in to cover the costs of schools, prisons and a broad range of other programs.

The state is expected to end the current fiscal year with $470 million in reserves otherwise the anticipated shortfall for fiscal 2014 would be that much deeper.

The Consensus Estimating Group, which includes three university economists, legislative research experts and officials from the state budget office and revenue department, meets in April and November each year to develop the projections used by the governor and Legislature in developing their spending plans for the state. The estimating process has been used since 1975.

The panel's report today was the first one to include projections for fiscal year 2014.

Budget Director Steve Anderson said it was too soon to say how the Brownback administration would propose closing the anticipated budget gap. The governor is expected to deliver his budget plan to the Legislature in January and Anderson said many details of the recommendations still were being worked out.

But Anderson said the governor intended to see K-12 education programs "fully funded" and that an earlier directive from the budget office to state agencies to prepare for 10 percent cuts in the coming fiscal year "doesn't apply to K-12."

Education spending accounts for the single biggest portion of the state budget followed by the costs of social services for the poor, elderly and disabled.

Anderson said the tax bill signed by the governor wasn't the one Brownback originally proposed but "it was the only tax cut" he got from the Legislature.

He said he didn't think a tax increase would be necessary to balance the coming budget but that it wouldn't be up to him to decide.



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