Topeka Kansas Gov. Mark Parkinson’s budget staff is telling state agencies to prepare status quo spending proposals for the next budget, anticipating that revenues from a sales tax increase will keep programs largely intact.
But a key legislator said Tuesday that the state’s finances remain fragile and could force a new round of cuts, despite the tax increase, which took effect July 1.
“They probably need to have a Plan B in place,” Senate Ways and Means Committee Chairman Jay Emler, a Lindsborg Republican, said of the administration.
The state Budget Division issued guidelines this week for agencies to use in drafting spending proposals for the state’s 2012 fiscal year, which begins in July 2011. The division provided an outline of those guidelines to The Associated Press upon request.
The guidelines presume as a starting point that revenues from the sales tax increase will help offset the loss of up to $438 million in one-time federal stimulus funds built into the current budget. The tax rose from 5.3 percent to 6.3 percent.
“Kansas is in a strong position compared to other states that are still facing overwhelming budget gaps,” said Parkinson spokeswoman Amy Jordan Wooden. “Assuming normal economic growth, the budget will remain in balance and Kansas will continue its economic recovery.”
But the Budget Division isn’t completely ruling out spending cuts during the next fiscal year. It also asked agencies to propose ways to trim their spending of state tax dollars by up to 5 percent, if necessary.
That’s in keeping with the division’s long-standing practice of asking agencies to prepare alternatives in case revenues don’t meet projections. Agencies also can propose new spending initiatives.
“We have to recognize the fragility of the budget,” Emler said. “All agency heads should look at their budgets as closely as possible and try to determine whether they can reach new efficiencies and cost savings.”
Agencies will submit their proposals to the Budget Division, which will then help the governor prepare a 2012 spending plan to submit to legislators in January. Because Parkinson is stepping down in January, the final version will be submitted by his successor.