Topeka ? Agreement seems to be growing among legislative leaders that both cuts in some programs and significant tax increases are necessary to balance the state budget.

“We don’t have any good alternatives,” said House Appropriations Committee Chairman Kenny Wilk, R-Lansing. “This year is a selection among bad alternatives.”

Legislators began the session facing a projected $426 million gap between expected revenues and spending commitments for the state’s 2003 fiscal year, which begins July 1.

And that gap is likely to grow, say legislative leaders and members of the House and Senate budget committees.

Still to be factored in is $25 million the state owes Panhandle Eastern Pipe Line Co. in tax refunds and interest after a Kansas Supreme Court decision late last month.

Moreover, the court rejected a rule the Department of Revenue used in determining Panhandle’s taxes. Legislators don’t know how many times the department applied the same rule in the same way for other companies in similar situations.

“The real problem is, are there any others out there?” said Senate Minority Leader Anthony Hensley, D-Topeka.

The $426 million projection also ignores a shortfall in revenue collections. From July 1, when the current fiscal year started, through Jan. 31, collections were nearly $98 million short of expectations.

State officials and economists plan to meet March 8 to revise revenue estimates used in budgeting. Many legislators expect them to slash estimates.

“There seems to be a consensus that we’re dealing with declining revenues,” said Sen. Jim Barone, D-Frontenac, a member of the Ways and Means Committee.