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Archive for Friday, November 6, 2009

Budget estimate declines by 4.2%

The view of the north side of the Statehouse.

The view of the north side of the Statehouse.

November 6, 2009

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— State fiscal experts Thursday said the Kansas economy remains stuck in recession, and that means a further drop in tax revenues and more budget cuts.

The Consensus Revenue Estimating Group met and revised downward the state revenue estimate for the current 2010 fiscal year by $235 million, a 4.2 percent drop from a previous projection.

Combined with additional costs as more people seek social services, and as more children enroll in schools and get lunch assistance, the budget gap has grown to $460 million. That would take an 8 percent across-the-board cut in state government to mend, officials said.

“The recession in Kansas is not over in the current fiscal year,” said Alan Conroy, director of the Kansas Legislative Research Department.

Gov. Mark Parkinson’s budget director, Duane Goossen, described the state as “at the bottom of the recessionary trough now, and we may linger there a little bit and then start to come up.” Officials pointed to the state’s jobless rate and low marks in consumer confidence as indicators of continued economic weakness.

An economic recovery could start as early as next summer, they said, but until then tough budget decisions must be made.

Parkinson promised to start making cuts before the legislative session starts in January.

In a statement issued by his office, Parkinson said, “To Legislators across Kansas, I say this: in the coming weeks, I will take whatever steps are necessary to balance the 2010 budget before the Legislature returns; that is a promise I have made, and it is a promise I will keep.” He urged cooperation “by acting like civil adults and working together.”

Those cuts will come by the end of the month after Parkinson returns from a trade trip to China.

“It’s a tremendous hole,” said state Sen. Jay Emler, R-Lindsborg, and chairman of the Senate Ways and Means Committee. “I don’t envy the governor at all on this one,” he said. There have already been four rounds of budget cuts this year, and Emler said more “effective programs” are going to be cut.

Public schools, which make up half of the state budget, will take a big hit.

Mark Tallman, lobbyist for the Kansas Association of School Boards, said damage to education will be “high” with cuts at the level needed to fill the hole.

The hit to public schools will take place right away. Parkinson’s budget director Goossen said the governor won’t even figure into the equation the $142 million in additional revenue that has been determined to be needed to help schools cover new costs for increased enrollment and a big increase in the number of students getting free or reduced price school lunches.

State officials are playing a balancing game with education funding because they have taken hundreds of millions of dollars from the federal stimulus package to prop up the budget. Under the federal law, the state must maintain public school and higher education funding at 2006 levels or it could jeopardize federal funding. Kansas is close to the line.

When lawmakers return, they will still face a budget out of kilter for the next fiscal year. Revenues for the fiscal year starting July 1, 2010, are already $122 million below the revised figure for the current fiscal year.

Emler said there will be pressure for tax increases. Republican legislative leaders have vowed to fight a tax increase.

House Democratic Leader Paul Davis of Lawrence blasted Republicans who dominate the Legislature.

“The people of Kansas need to brace for the consequences of this economic downturn and the billions of dollars worth of special-interest tax cuts that the Republican-controlled Legislature has passed over the last decade,” Davis said. “The result of this will be lower-quality schools, compromised public safety, health care being denied to our poorest citizens and thousands of Kansans unable to access state services.”

The $235 million downward revision from previous estimates is the result of slumping tax collections.

The revenue estimating group is composed of representatives of the Division of the Budget, Department of Revenue, Legislative Research Department, and one consulting economist each from Kansas University, Kansas State University and Wichita State University.

Comments

jumpin_catfish 5 years, 1 month ago

Go ahead raise my taxes. Texas here I come.

getreal 5 years, 1 month ago

We have given over $1billion in tax giveaways to special interest groups over the last 10 years. When are they going to stop this nonsense?

monkeyhawk 5 years, 1 month ago

"Those cuts will come by the end of the month after Parkinson returns from a trade trip to China."

Instead of you and me paying for his junket, he could pay his own way, or just stay home.

Don't think that he isn't looking at this: "California takes interest-free loan from working people"

http://hotair.com/archives/2009/10/31/california-takes-interest-free-loan-from-working-people/

deskboy04 5 years, 1 month ago

Kathleen got out of Topeka just in time to avoid having to make these tough decisions.

Thinking_Out_Loud 5 years, 1 month ago

Nonsense, deskboy04. Gov. Sebelius went through a series of these trims before she was named Secretary of Health and Human Services. Furthermore, she trimmed the budget when she was first elected in 2002. Go back and revisit the news articles in the first two years of her administration, and the last two years.

The responsibility for resolving these issues lies squarely in the laps of both the Legislature and the Governor. Regardless of party affiliation, they ~must~ work together to address them. They must work toward consensus, and quickly, and for the good of the State they must leave partisan differences behind. If it does not happen, I will not vote for an incumbent candidate.

SettingTheRecordStraight 5 years, 1 month ago

4.2% less for government. Now that's a good thing.

BigDog 5 years, 1 month ago

Actually Governor Graves did the two major allotments back in 2001-2002.

Bob_Keeshan 5 years, 1 month ago

The State of Kansas collects $2 billion every year in sales taxes. The current rate is 5.3%.

The State of Kansas exempts an additional $4 billion that would otherwise be collected.

Are those exemptions really creating a vibrant economy? You would wipe every exemption, with the exception of the exemption on RX drugs (about $110 million/year) off the books and cut the sales tax in more than half.

Tell me, Kansans - which would you prefer? $4 billion in special interest exemptions or a sales tax rate of 2.5%?

Kansas is also one of only 11 states to collect a sales tax on food. Tell me, which would you prefer? $4 billion in special interest exemptions or no sales tax on food?

SettingTheRecordStraight 5 years, 1 month ago

Bob,

Great point. Can we eliminate the exemptions AND get government to lower the sales tax rate and/or eliminate sales tax on food?

Bob_Keeshan 5 years, 1 month ago

Sure you could, as long as you were willing to accept additional revenue to the state to support our schools and universities.

The tax structure we currently have is choking our most valuable asset. Without qualified employees, we will never attract new businesses. We could eliminate all taxes, businesses won't come to Kansas if they can't get the best employees.

The state has cut taxes during more than half of the legislative sessions since 1998, yet Kansas is no better positioned in this recession despite 90% of those tax cuts going specifically to businesses and special interests.

There is no economic benefit to cutting taxes for businesses. There is massive economic benefit to funding your schools and universities. Grow great employees and you grow great businesses.

remember_username 5 years, 1 month ago

Maybe it's not a bad idea cutting back on education. Trying to education most Kansans seems futile anyway, what was it Twain said about teaching a pig to sing? Heck, all the smart ones just move away at the first opportunity. Keep your young away from schools and you can keep them in the kitchens and in the fields where good Kansans ought to be.

justforfun 5 years, 1 month ago

Aw heck with that!! Give all the state employees a DOUBLE end of year bonus like Lawrence did!! Made sense on the local level I'm sure it will work at the state level! HAHA

ralphralph 5 years, 1 month ago

Ex-Gov Chatty Kathy killed our economy. Period.

Armen Kurdian 5 years, 1 month ago

@catfish, problem w/Texas is that property taxes are really high, that's how they make up for a lack of personal income tax. At least you fellow Kansans don't live here in California...talk about a disaster of epic proportions. I'm living in a zombie state that doesn't know it has been bankrupt for years. Notice as how taxes and fees get higher, the budget bloats larger and the eventual bankrupcy just grows in magnitude.

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