Topeka — The state will collect $89 million more than previously expected for its current budget, but improving revenues will only permit Kansas to keep up with rising government costs, fiscal forecasters predicted Wednesday.
The new official revenue projection is $4.63 billion total for the current budget year, which ends June 30. That's 2 percent higher than the previous projection, made in April.
The forecasters also issued the first official estimates for the 2006 budget year, projecting a 4.5 percent growth in general revenues to $4.84 billion. If the forecasters are correct, the state will see revenues grow $210 million in fiscal 2006.
However, the state already expects to face additional costs in providing social services to the needy and providing pensions to government employees -- commitments likely to eat up much of the extra money foreseen in the new forecast.
"It improves the picture from what we thought it was," said State Budget Director Duane Goossen, one of the forecasters. "We're able to absorb the new costs."
Legislators and Gov. Kathleen Sebelius will use the new numbers in drafting a fiscal 2006 budget. Sebelius and her budget staff are preparing recommendations and plan to present them after the 2005 Legislature convenes Jan. 10.
The 15 forecasters included Goossen and other members of Sebelius' budget staff, Department of Revenue officials, legislative researchers and three university economists. Goossen said the new numbers reflected an improving economy.
The state's monthly unemployment rates have been lower this year than last year. Also, for seven months, the number of people holding non-farm jobs has been higher than in 2003.
"The Kansas economy is growing," Goossen said. "It's growing at a steady rate."
But government costs also are growing. Social services are now expected to require $31 million more than was budgeted for fiscal 2005, then rise an additional $35 million in fiscal 2006, Goossen said.
Also, costs associated with government employee pensions will increase $25 million in fiscal 2006, he said.
As a result, said Sebelius spokeswoman Nicole Corcoran, "The new numbers don't markedly change the budget or mean that we can now cover new programs."
The situation -- better-than-expected revenues but rising costs -- has been common for states this year, said Arturo Perez, a fiscal analyst for the National Conference of State Legislatures.
"What's been tempering the good news on the revenue side is bad news on the expenditures side," Perez said.
Still, Kansas House Speaker Doug Mays said the state's brighter fiscal forecast relieves pressure.
"I would guess, barring some event that would be a setback, we might have even more good news six months from now," Mays said.
The new fiscal forecast assumes higher growth in individual and corporate tax collections for the current budget year than had been predicted in April.
But the forecasters now predict a slower rate of growth in retail sales tax collections than they had previously. Alan Conroy, director of legislative research and one of the forecasters, said the change partly reflected high gasoline and home fuel costs, which cut into what Kansans spend on consumer goods.