Kansas budget outlook not favorable

TOPEKA, Kan. (AP) — A new revenue forecast due out Monday will tell Republican Gov. Sam Brownback and the GOP-dominated Legislature the size of the budget problems they’re facing.

Legislative researchers, members of Brownback’s budget staff, Department of Revenue officials and university economists were draft a new financial forecast Monday afternoon, revising revenue projections for the budget year that began in July and issuing the first official numbers for the coming budget year.

Unofficial predictions indicate a $14 million budget shortfall by July and $282 million by July 2016, the Legislature’s nonpartisan research staff has said, because tax collections in September and October fell about 4 percent short of expectations.

The budget problems come after Brownback’s massive personal income tax cuts were enacted in 2012 and 2013 to stimulate the economy. The state has cut its top rate by 26 percent and exempted the owners of 191,000 businesses from income taxes altogether.

A more pessimistic forecast would cause the gaps between anticipated revenues and spending commitments to grow. The governor and legislators will be bound by the forecast come January’s annual session, and the state isn’t allowed to run deficits.

“The numbers have been bad, and I don’t see anything that would change that quickly,” said Rep. Jerry Henry, of Atchison, the ranking Democrat on the House Appropriations Committee.

Brownback argues the tax cuts are boosting the economy and, for months, he has projected confidence that any budget problems can be managed. He did not offer a prediction about the new revenue forecast Monday morning.

“We’ll see what it is when it comes out,” Brownback told reporters before ducking into a staff meeting.

The current forecast, issued in April, projected Kansas would collect just shy of $6 billion in general tax revenues during the current budget year. Legislative researchers’ unofficial prediction for the budget year starting in July 2015 is revenue growth of 3.6 percent, to nearly $6.2 billion.

The state’s general tax revenues peaked at $6.4 billion for the 2011-2012 budget year — before the tax cuts took effect — and dropped to $5.6 billion during the previous fiscal year. If Kansas meets the existing forecast for the current budget year, revenues would grow 5.7 percent, which is healthier than legislative researchers typically assume in their long-term budget predictions.

The current state budget calls for spending more than $6.3 billion on public schools and state programs, which would deplete the state’s cash reserves. And legislative researchers estimate that the cost of current spending commitments will rise to $6.45 billion in the next fiscal year.

 

 

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

 

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