Editorial: Eyeing the estimates

A lot is riding on today’s meeting of the state Consensus Revenue Estimating Group.

This group of state officials and university economists meets twice each year to examine various economic factors and revenue figures and issue an educated guess about what state revenues will be for the coming fiscal year. Those estimates then are used to guide budget discussions by the governor and state legislators. Waiting for the revenue estimates was one reason legislators gave for not passing a budget before they took a one-month break.

Both the governor and legislators undoubtedly are hoping for a rosier number than the estimating group delivered at its November meeting. At that time, state revenue for FY 2014, which begins on July 1, was estimated at $5.464 billion. That’s a lot of money, but it’s $734 million less than the $6.198 billion in spending approved for the current fiscal year.

That’s a big hole to fill — or cut — in the coming year’s budget.

Duane Goossen, who served as state budget director under Govs. Graves, Sebelius and Parkinson, is in a better position than most to evaluate the state’s current budget picture. He is vice president for fiscal and health policy for the Kansas Health Institute and pointed out some interesting state budget figures in a blog post this week.

Goossen looked at the FY 2014 budget plans being supported by Gov. Brownback, the Kansas Senate and the Kansas House. Brownback is calling for $6.087 billion in spending; the Senate, $6.038 billion; and the House, $5.964 billion. All of those plans call for spending well above the $5.464 billion that estimators said in November the state would collect in revenue. Even the House spending plan, the smallest of the three, exceeds the November revenue estimate by $500 million.

Looking at this situation, Goossen saw four options for the budget negotiators. All three of the budgets already take the first option of borrowing from other funds, a step Goossen sees as only a “short-term solution.” Or they can use up the state’s available bank balance, another short-term solution that also is unpopular with lawmakers who want to maintain sizable ending balances. They can find a way to add tax revenue to match spending over the long haul. Or, Goossen said, they can “hope for a better Consensus Revenue Estimate” that can help them fill the budget gap.

So, no pressure, estimators, but it sure would be nice if you could come up with about half a billion more dollars to fund the state budget next year.

Of course, that’s not how the estimators work. Coming up with revenue estimates is serious business that can’t reflect some of the magical thinking currently being employed by state budget writers.

The state can’t spend more than it takes in, which is why the estimates being made in Topeka today will either ease or vastly complicate finalizing a state budget for FY 2014.

Stay tuned.