Topeka ? Gov. Kathleen Sebelius has asked all cabinet agencies to cut planned spending by 1 percent to 2 percent, even before the state begins a new budget year on Tuesday, saying the move is needed because of the sluggish economy.

She told the State Financial Council on Friday that none of the cuts should be made in areas that would affect public school and university students, such as the money the state sends each year to local school districts.

The governor said the cuts were needed because state general fund receipts were $50 million below expectations last month and economic growth is slower. Sebelius left it up to the agencies to decide where the cuts should be made. Sebelius spokeswoman Nicole Corcoran said there has been no talk of layoffs.

“The Kansas economy is still performing quite well compared to other states,” Sebelius said. “Recently, however, our growth has showed signs of slowing down. In addition, interest rates have fallen, causing our interest income to decrease.”

A 2 percent cut would amount to between $40 million and $50 million as not all the $6.4 billion state general fund budget will be included because of the governor’s education exemption, said Senate Ways and Means Chairman Dwayne Umbarger. The total budget is about $13.6 billion, including federal and other funds.

“Revenue estimates aren’t coming in as expected. As a nation, we’re in a form of recession and we’re beginning to see it in the Midwest,” said the Thayer Republican. “In Kansas, we are going to be looking at belt tightening.”

Sebelius said another problem was that state revenues were reduced by $87 million when the Legislature failed to pass a bill to decouple from federal tax legislation.

“Legislators didn’t have the nerve to decouple,” Umbarger said. “It would have been interpreted as a vote not to reduce taxes and some people would have interpreted that as raising taxes.”

Senate President Steve Morris said he and House Speaker Melvin Neufeld, an Ingalls Republican, asked the governor to ask for the reductions.

“It’s the prudent thing to do. We are in a position where revenues are declining and we are going to have more financial pressures next year,” said Morris, a Hugoton Republican.

The governor said she has asked the State Board of Education and State Board of Regents to look at ways to cut overhead and administrative costs. She also asked the judicial and legislative branches to find ways to cut back.

Morris said much of the problem is because energy prices “are getting out of control and that is having a negative effect throughout the economy.”