Parkinson’s ready to make more budget cuts, if necessary

Governor is optimistic the economy is turning around

? Gov. Mark Parkinson expressed optimism Monday about the state’s economy, but said he is prepared to make additional spending cuts to keep Kansas’ next budget in the black.

Parkinson praised legislators for the bipartisan plan they passed to close a projected $328 billion deficit in the $13 billion budget they had previously approved for the state’s 2010 fiscal year, which begins July 1. The plan contains a mix of spending cuts and revenue-raising measures, though not a general tax increase.

The Democratic governor made his comments during his first news conference since the Republican-controlled Legislature adjourned its annual session early Saturday. He called the 10-day wrap-up of the session “remarkably successful.”

But some Republicans have criticized the budget-balancing plan because it leaves the state with almost no financial cushion. Legislative researchers believe the state will have only $17,000 in cash reserves at the end of June 2010.

“My view is always more optimistic than most people I know,” Parkinson said. “I tend to see glasses not as half-full. I tend to see them as overflowing. I will say that I have a sense that the economy is improving.”

If state revenues dip even slightly below expectations, the 2010 budget will have a projected deficit again. Kansas law gives the governor the power to make spending cuts without legislative approval to prevent a deficit.

“I’m fully prepared to do that in a responsible way if and when that time arrives,” Parkinson said, adding that he would consult with legislative leaders in both parties first.

Parkinson took over as governor April 28 after Kathleen Sebelius resigned to become U.S. secretary of health and human services. Parkinson, a former Kansas Republican Party chairman who switched parties to run on Sebelius’ ticket in 2006, immediately called for bipartisanship.

And Senate Majority Leader Derek Schmidt, an Independence Republican, said: “From my vantage point, Governor Parkinson has been much more hands-on in resolving the issues we’ve been wrestling with than the previous governor had been, at least during this legislative session. He was very engaged.”

But Parkinson gave credit to legislators, saying they worked together to “really put the state on what I believe is a sound footing for the future.”

The budget-balancing plan legislators approved included $138 million in spending cuts, including $84 million from aid to public schools.

But after three rounds of budget adjustments, public schools are faring better than other parts of the budget, and some agencies are seeing double-digit percentage cuts in their allocations of state tax revenues.

For example, the judicial branch expects its 2010 budget to fall $8 million short of funding its current operations.

But Parkinson said he is committed to seeking more money when legislators reconvene in January 2010 if the courts face furloughing employees or closing offices extra days each month.

“We don’t want our courts shutting down,” Parkinson said. “I do not want the courts furloughing employees.”

On the revenue side, the budget-balancing plan diverts state funds from cities and counties and pulls some of the fees paid to regulatory agencies, which are deposited in special funds, into the state’s main bank account.

It counts on the state receiving $50 million in licensing fees from yet-to-be-chosen developers for state-owned casinos in Sumner and Wyandotte counties.

It contains an “amnesty” provision giving the Department of Revenue more power to waive penalties on back taxes, with the goal of getting Kansans to pay up. It also gives Kansans less time to file for sales and income tax rebates and decreases income tax credits for businesses and others.

Parkinson defended the decision to not build up the state’s cash reserves, saying it would be unwise during a recession.

“First, it extracts money out of the private sector that we need flowing in the private sector to get the economy moving again,” he said. “The second thing that it does is that it requires us to make additional cuts to state programs that have already taken major sacrifices.”

But he added: “As this economy comes out of this recession and grows, our policy — my policy to future administrations — would be to create a real and lasting surplus to help us when we then inevitably hit the next recession,” he said.