Topeka ? State government’s budget picture has brightened considerably since 2003 when the till was empty.

“Things are certainly better than they were earlier,” said Gov. Kathleen Sebelius’ budget director Duane Goossen. “That has really helped put us in a better position.”

When Sebelius took office, cash balances in state coffers had dipped to nearly zero as the state reeled from a national recession and the shocks to Wichita’s aircraft manufacturing industry caused by the 9-11 terrorist attack.

But since then, a steadily improving economy, increased governmental borrowing and efficiencies helped build the state’s ending balance up to $478 million for the fiscal year that ended June 30.

Stronger than expected revenues have paid for $290 million in court-ordered school funding increases and continued health care increases.

“It certainly makes everything easier to deal with when you have that revenue there,” Senate President Steve Morris, R-Hugoton, said.

Increasing tax collections have many politicians, including Sebelius and House Speaker Doug Mays, R-Topeka, talking about cutting taxes, including exempting new machinery and equipment purchases from property taxes .

“If you’re going to cut taxes, you want to do it when revenues are increasing, and make them selectively to help keep the economy rolling,” Mays said. “Machinery and equipment is close to a done deal.”

But Morris, a former chairman of the Senate budget-writing committee, said there were still problems on the horizon for Kansas.

“We can’t sit back and relax and think we have all the problems solved, because we don’t,” he said.

For one thing, public schools, which account for half the state budget, will require more funding.

Last year, the Kansas Supreme Court ordered the Legislature to increase school funding, and accepted the $290 million effort as a down payment pending completion of an education cost study that will be released Monday, the first day of the 2006 legislative session. The court said the Legislature had failed to comply with the constitutional mandate to provide suitable education funding.

“We’ll have a better idea what we are up against once we get the report,” Morris said.

Medicaid funding continues to rise and regents universities are seeking hundreds of millions of dollars to clear maintenance problems that have been deferred for years.

In addition, commitments made by the Legislature to pay off pension bonds, build research facilities and restructure the highway plan all start escalating over the next few years.

On another budget front, an effort will be made this year to pass either legislation or a constitutional amendment restricting state spending to inflation plus population growth and require statewide votes on tax increases, or a super majority in the Legislature.

Most state leaders are resistant to such proposals, saying they would hinder government’s ability to invest in needed programs or respond to emergency situations.

In a recent interview, Sebelius stated why she opposed the proposals.

“We have the perfect mechanism in place to control taxes and spending, and that’s called elections,” she said.