Archive for Tuesday, November 4, 2003

Revenues dictate flat spending

Experts forecast state budget with limited flexibility

November 4, 2003

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— No funding increase for public schools or higher education, more people on waiting lists for social services, and no state employee pay raise.

That's what budget experts forecast Monday when they released revenue projections for the next fiscal year.

And while there was a small silver lining in the dark budget clouds, the Senate's chief budget writer, Steve Morris, R-Hugoton, looked at the numbers and said: "Our flexibility is pretty limited."

Despite the projection of essentially flat revenues and demands for more services and education funding, both Morris and Rep. Melvin Neufeld, R-Ingalls, said there was no movement in the Legislature for a tax increase.

"I don't think it will be much different than last session," said Neufeld, who leads the House Appropriations Committee. "We're in a position to replicate -- it's doable."

Their comments came after a group of state fiscal experts called the Consensus Revenue Estimating Group met for more than two hours and delivered a revenue estimate that lawmakers and Gov. Kathleen Sebelius will use to put together a budget when the legislative session starts in January.

The bottom line: The state of Kansas will collect about $4.5 billion in revenue in the current fiscal year and roughly the same amount in the next fiscal year, which starts July 1.

That would pay for a budget that includes nothing additional for public schools, nor a state employee pay increase. State employees received a 1.5 percent pay increase this year.

The revenue forecast would provide enough to cover increasing medical costs of Medicaid but not enough to remove the nearly 2,800 people on waiting lists for home health care.

And it would give colleges and universities no extra funding for operations, though it would provide $10 million to start paying off debt on bonds being used to build research facilities at Kansas University, Kansas State University and Wichita State University.

And if the revenue forecast is accurate, there would not be enough to reinstate revenue sharing with cities and counties that was cut this year. The state highway agency also would not be repaid for transfers that were taken from it.

In fact, about $226 million of revenue in fiscal year 2005 will be needed to pay off accounting gimmicks and cover spending that was created by using one-time federal money this budget year.

Even so, the $4.5 billion represents a 5.6 percent increase in revenue growth from the 2003 fiscal year, signaling that the Kansas economy has bottomed out and is starting to revive, officials said.

"Economically, Kansas is turning the corner and moving back up," said Duane Goossen, Sebelius' budget director. He said the state was starting to see stronger returns in personal and corporate income taxes and sales taxes that match national trends.

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