Topeka ? Budget experts Monday said the Kansas economy was growing at a healthy pace, but still not fast enough for state government to avert a financial meltdown during the next couple of years.

That means when lawmakers return to Topeka next week, they once again will debate expanded gambling as a way to buttress the state treasury.

“Certainly, the Kansas economy is growing at a moderate rate,” budget director Duane Goossen said after the state added $127 million to its official revenue projections, the largest increase in seven years.

The revenue projections are used by lawmakers to determine how much they can appropriate in the state budget.

But Goossen and others said even with the state showing solid increases in the collection of personal and corporate income taxes, spending commitments by lawmakers would drive the state’s reserves down to near zero in the fiscal year that starts July 1, 2006.

Dialing for dollars

The new estimates added $55 million in revenue for the current fiscal year and $72 million in the next fiscal year, which starts July 1, for a total of $127 million.

But the school funding law recently passed by Republicans will also cost $127 million. That plan — assailed by Democrats as inadequate and irresponsible — is pending before the Kansas Supreme Court.

And budget experts said the state also faced a $58 million increase in social service spending, as well as higher costs for commitments to the state pension system and highway plan.

“It’s going to take more money,” Sen. Pete Brungardt, R-Salina, said Monday.

More casinos and slot machines might be a way to provide that money.

On Thursday, the House-Senate Committee on State-Tribal Relations will consider Gov. Kathleen Sebelius’ proposed compact with two Indian tribes to build a major resort-casino near the Kansas Speedway in Wyandotte County and allow slot machines at three pari-mutuel racetracks around the state. The measure could provide up to $125 million per year to the state, according to its supporters.

Another proposal before the Legislature would allow casinos in five areas statewide and a “Slots for Tots” proposal that would put slot machines at five tracks with the revenue dedicated to schools. That plan would raise $150 million, supporters said.

Brungardt described the two gambling options as alternatives A and B.

“Increased taxes becomes Alternative C,” he said.

‘Steep hill’

It has become almost an annual tradition over the past 12 years for the Legislature deep in April to have a gambling debate and then vote it down.

This year, Sebelius’ chief counsel Matt All will present the compact between the state and Sac and Fox and Kickapoo tribes to the committee.

All said the compact should be considered regardless of the budget situation and school finance lawsuit, because it would provide revenue to the state and perhaps capture Kansas dollars lost to casinos in Kansas City, Mo. Four tribal casinos operate in northeast Kansas, but they share no taxes or revenue with the state.

“If Kansans are going to gamble, why not benefit Kansas?” he said.

But Glenn Thompson, a gambling opponent from Wichita, said he didn’t believe legislators were inclined to expand gambling.

“We had a majority of legislators opposed to expanded gambling when we left for the break, and I think we still have a majority of legislators opposed,” Thompson said.

Brungardt conceded that expansion of gambling faced “a steep hill.”

Lawmakers return for the wrap-up session April 27, after a three-and-one-half week break.