Experts suggest caution with using stimulus funds

? State policy experts are warning legislators not to get overstimulated by the federal stimulus package.

While the American Recovery and Reinvestment Act provides an unprecedented funding stream from the federal government to the states, the National Conference of State Legislatures warned that the tap eventually will run dry.

“After two years, we do walk off the cliff and the enhancements are no longer there,” said David Shreve, an education policy expert with the NCSL.

That means once the $787 billion package is spent, states will be looking at having to make up much of the funding from their own tax revenues.

In a videoconference, NCSL staff members gave Kansas lawmakers a description of the various funding pots from the recently approved federal stimulus package.

Kansas stands to gain approximately $1.7 billion over the next several years. And while the funding will provide much-needed assistance during a time when Kansas tax revenues have fallen below projections, legislators have remained cautious.

Senate Majority Leader Derek Schmidt, R-Independence, described the use of stimulus funds as an “exercise in delaying difficult choices.”

Senate President Steve Morris, R-Hugoton, said the stimulus funding will help out in the 2010 fiscal year that starts July 1, and the 2011 fiscal year.

But when fiscal year 2012 rolls around, the federal funds will run out and “that will be a critical year we have to get our arms around,” Morris said.

Federal funding will flow to Kansas in four main areas — infrastructure improvements, such as road projects; Medicaid assistance; education; and direct assistance to the state.