Topeka Budget planners received yet another dose of unwelcome news Tuesday with a report that the state's March revenue collections were $27 million less than expected.
Economists and state officials had estimated March 8 that revenue for the month would total $306 million.
But figures indicate total revenue of $279 million, due mostly to shortfalls of $10.8 million in individual income tax payments and $14.4 million in sales tax collections, according to the Legislative Research Department.
"We may not have hit the bottom on our revenue collections yet," said State Budget Director Duane Goossen. "The effects of the economy may still be coming toward us."
Goossen cautioned, however, that the new numbers don't necessarily mean the state's budget gap has grown to $727 million from the $700 million reported in mid-March. Lower-than-expected receipts in one month are sometimes followed by revenues exceeding the official estimate the next month.
Still, the March shortfall was disconcerting because the estimates were prepared less than one month ago.
Senate Ways and Means Chairman Steve Morris, R-Hugoton, said the latest report would not affect his committee's work on the state budget for the fiscal year that starts July 1. He said the number cannot be ignored.
He said the budget committee and the Senate Taxation and Assessment Committee were hoping to finish a budget and revenue package this week.
Last week, a Senate working group produced a plan to save $257.2 million by cutting spending and transferring money from special funds while tapping $171 million from the state's "rainy day" reserve accounts. That plan would leave about $272 million to be covered by higher taxes or fees.
The House, meanwhile, has passed its own budget bill a plan that leaves a $128 million difference between spending and expected revenues and does not propose any new revenue.
Morris has no intention of following the House lead.
One option being considered is lowering the rainy day reserve, also known as the ending balance, enough to free up $104 million.
By law, legislators must approve a budget that reserves 7.5 percent of total state general fund expenditures for cash flow and emergency purposes.
Economic outlook mixed
The March revenue shortfall came amid mixed economic signals about the economy.
The state's unemployment rate fell in February as some laid-off Kansas workers returned to their jobs, including more than 4,000 in the Kansas City metropolitan area. Layoffs had been blamed in part for declining revenue.