The state's social service caseloads are expected to grow in the coming budget year despite signs of economic recovery. Also, state government will be paying a larger share of the costs after federal aid is scaled back starting July 1.
Legislative budget writers got fresh caseload projections this week as they tried to craft spending plans that would be acceptable to majorities in both the House and Senate after the Legislature returns next week for the wrap-session.
According to the projections prepared by the Kansas Division of the Budget and the Kansas Legislative Research Department, total spending on the full range of social services provided by the state and its contractors will go up $108 million to $2.45 billion in the fiscal year that begins July 1.
Spending on social services in the current budget year is expected to total $2.34 billion.
Enhanced federal aid that began with the federal economic stimulus of 2009 is scheduled to end June 30. That means the state's share of the cost of providing Medicaid services will grow by more than $246 million in the coming budget year, according to the projections.
Alan Conroy, head of the Legislature's research department, told lawmakers today that the state's jobless count is shrinking slightly as the economy recovers but still hovers at 6.8 percent, not including those who have given up looking for work or who are underemployed.
The team of economists whose estimates of future state tax collections and other revenue are used by the Legislature to craft budgets is known as the Consensus Revenue Estimating Group.
The team meets each fall and spring and its latest projections were made April 15. The longer, official memorandum of their conclusions drawn from various state economic indicators studied at last week's meeting has not been released yet. But Conroy highlighted some of the factors the economists noted and some of their forecasts for the months ahead.
The team predicted a fiscal 2012 jobless rate of 6.1 percent, a full point below the 7.1 percent unemployment peak in 2009 when the current recession apparently was at its worst.
Inflation was forecast for 2.2 percent in 2011 and 2012, up from 1.6 percent in 2010.
The economists predicted Kansas personal income would rise 5.4 percent in 2012, slightly less than the 5.6 percent increase they projected when they last met in November 2010.
An overview report submitted by Conroy to the Senate Ways and Means Committee noted that the state's commercial aviation sector continues to grow but that general aviation remains weak. It is too soon to see results from a $35 billion air tanker contract awarded in February by the U.S. Air Force to Boeing, Conroy said.
Prices for oil and gas and the major Kansas crops of wheat, corn, sorghum and soybeans are all up significantly from a year ago, he said.
Despite signs of strengthening in the economy, the estimators revised downward their projections of state revenues for the coming fiscal year in large part because of recent changes to the federal income tax code, to which state income taxes are pegged. Those federal changes are expected to cost the Kansas treasury $77 million in the current and coming fiscal years.
House and Senate budget negotiators met Tuesday and resolved a number of differences between their respective chambers' budget plans, but agreed to hold off on further negotiating rounds until the full Legislature returns next Wednesday.