Topeka ? The state’s budget picture improved dramatically Thursday when officials and economists added nearly $221 million in projected state revenue collections through next June.

That adjustment – adding an additional 4.5 percent to projected revenues – is the largest since various officials began meeting 30 years ago to issue fiscal forecasts that legislators and governors use in budgeting.

“The recovery has arrived in Kansas,” said Alan Conroy, director of Legislative Research and member of estimating team.

The estimators said they expect the state to collect more than $5.16 billion in revenues during the 2006 fiscal year, which began July 1. Their previous estimate was about $4.93 billion. If they’re correct, revenues would grow 6.5 percent in fiscal 2006 over fiscal 2005.

That’s good news for legislators, who’d been worried that even with growing revenues, they’d have trouble covering demands for additional spending on public schools, social services, highway projects and pensions for teachers and other government employees.

But the size of the change surprised House Speaker Doug Mays, R-Topeka, who expressed concern that growth in retail sales taxes – a sign of how much consumers are buying – still is lagging behind growth in personal and corporate income taxes.

Mays said he thought Hurricanes Katrina and Rita on the Gulf Coast might have dampened the economic picture.

“That’s very encouraging,” he said of the new numbers. “It means that the businesses in this state feel comfortable enough with our national economy to hire people.”

The forecast is issued each spring and fall by legislative researchers, members of the governor’s budget staff, Department of Revenue officials and university economists.

Legislators and other officials had expected the new forecast to be rosier than the previous one, made in April and revised in June. From July 1 through Oct. 31, the state collected nearly $99 million more than expected in tax revenues, largely from individual and corporate income taxes.

And the Department of Labor had noted that October was the 19th consecutive month in which more people held nonfarm jobs than during the same month the previous year.

“The positive revenue news shows that families and businesses are earning more money, which is more evidence Kansas is on the right track,” Gov. Kathleen Sebelius said in a statement.

Sebelius, a Democrat, attributed the positive news to her administration’s efforts to create jobs.

The revised figures show the state with a balance of $426.3 million when the current budget year ends on June 30, 2006. That figure drops to $370.1 million in June 2007 based on current spending projections, including the repayment of bonds for highway programs and additional spending already on the books for public education.

Legislators increased school spending by $290 million in 2006, pressured by a Kansas Supreme Court ruling saying more money was needed. However, the court also said legislators must conduct a cost study to determine how much more spending is needed. The justices have suggested they might order an additional $560 million absent better figures.

State Budget Director Duane Goossen said the new projections eliminate a budget deficit that legislators had been anticipating in April for future years. The state still will be required to tap its reserves to pay for expenditures, but will not be forced to make drastic cuts in 2007 or 2008 to pay the bills.

“This is very good news,” Goossen said.