The Budget Blog

What a difference three years makes

By Duane Goossen

January 5, 2012

What a difference in the budget outlook!

During the last three years, Kansas labored to get through a rough economic patch and keep finances balanced. The State General Fund experienced unprecedented revenue drops from one year to the next and, in FY 2010, a staggering $800 million expenditure cut. The main topic of every legislative session during that period was the budget.

This year the outlook has changed. The governor and Legislature could continue current spending levels in the FY 2013 budget they are about to construct, and the State General Fund balance would grow. There may be many good policy reasons to make changes in spending for education or for Medicaid or for public safety or for state employee salaries, but the focus can be on the policy. Spending and revenue levels do not need to be adjusted in order to balance the budget.

Look at the State General Fund profile chart below. The column for FY 2011 (July 1, 2010–June 30, 2011) shows what actually happened. The FY 2012 column shows the most recent Consensus Revenue Estimate and the legally approved budget for the fiscal year we are now halfway through. The FY 2013 column shows the official Consensus Revenue Estimate of receipts for the next budget year and how expenditures would look if the FY 2012 budget were repeated in FY 2013. The result is an ending balance that grows to almost $600 million. The notes on the right show the big issues that may have the most profound effect on the FY 2013 budget.

Outlook chart

Look also at a similar profile from the Kansas Legislative Research Department (KLRD). The KLRD document assumes that the governor and Legislature will want to increase the current approved FY 2012 budget by $34.4 million for school finance and $17.6 million for human service programs, and then that FY 2013 spending will be increased by more than $153 million. Even with those increases, the State General Fund would still have an ending balance of $388.9 million.

What a difference from the last three years!