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April 23, 2013
Estimators met April 19 to update their forecast for how much money will come to the State General Fund (SGF) in the remaining portion of fiscal year 2013 (July 1, 2012, to June 30, 2013) and FY 2014 (July 1, 2013, to June 30, 2014).
The updated estimate does not alter the state’s budget situation. The changes made to the revenue estimate were really quite small. The estimators raised the forecast for FY 2013 income by $29.9 million but reduced expectations for FY 2014 revenue by $10 million. The updated estimate means that the SGF will likely have about $30 million more in the bank to start FY 2014, but the key problem that policymakers face for FY 2014 remains the same. Expected FY 2014 revenue, now pegged at $5.454 billion, is dramatically less than the current spending level of $6.198 billion.
Revenue drops almost $1 billion from FY 2012 to FY 2014. Actual receipts to the SGF in FY 2012 totaled $6.413 billion. The $5.454 billion forecast for FY 2014 represents a $959 million revenue drop over two years. The key explanatory table from the revenue estimate — Table 1 — shows those totals below. Even during the Great Recession, SGF revenue did not fall that far or that fast. In FY 2007 revenue reached $5.809 billion and then fell $618 million over a three-year period to $5.191 billion in FY 2010, the toughest year of the recession. However, Kansas received significant additional monetary help from the federal government in FY 2010.
The estimate does not include FY 2015. In January the governor departed from usual practice by proposing a two-year budget that included FY 2015, and in response the Legislature will likely adopt a FY 2015 budget. However, there is no official revenue estimate yet for that year, which means that the revenue numbers being used to develop the FY 2015 budget should be viewed cautiously. The first official Consensus Revenue Estimate for FY 2015 will be calculated in November.
After estimators complete a Consensus Revenue Estimate each year in November, they update the estimate in April. In essence, the estimate is a “consensus” between the Division of the Budget, representing the governor, and the Legislative Research Department, representing the Legislature. However, Department of Revenue staff and three consulting economists from state universities help develop the estimate by providing expertise and advice.
—Duane Goossen, KHI's Vice President for Fiscal and Health Policy, served as state budget director for 12 years in the administrations of three governors — Republican Bill Graves and Democrats Kathleen Sebelius and Mark Parkinson. He also served in the Kansas House of Representatives from 1983 to 1997.