New revenue numbers show $715 million shortfall through 2016

? Gov. Sam Brownback and Kansas lawmakers will have to cut $279 million out of the current year’s budget, plus another $436 million in the fiscal year that starts in July.

That’s the bottom line of the new revenue estimates that state budget officials released Monday showing that the tax cuts enacted in 2012 are causing a deeper reduction in state revenues than had earlier been projected.

Budget Director Shawn Sullivan said he has been working on plans since June to address a possible shortfall. He said those plans will include spending reductions and looking for efficiencies within the budget, but they will not include any changes in the Brownback administration’s tax policies.

That raises the likelihood that the state will have to make significant cuts in education spending and other social programs, possibly before this fiscal year is over, something Brownback said during the campaign he would not do.

Senate Democratic Leader Anthony Hensley of Topeka accused Brownback of lying about the state’s budget condition during the campaign.

“It’s obvious to me with these numbers that he’s known all along that his policies are going to bankrupt the state,” Hensley said.

But Sullivan tried to downplay the possibility of significant budget cuts.

“We’re going to focus over the next four to six weeks on where we can find efficiencies, where we can curb growth, those kind of things,” he said. “We’ve already found $100 million of efficiencies without cutting services, whether that be education or anything else.”

Still, Sullivan did not rule out the possibility that Brownback may need to directly order spending cuts through a process known as “allotments” before the Legislature convenes in January.

“I’ve been working on various options for, really, since June when I started this job,” Sullivan said. “We’re at the point now where we know what the revenues are, we know what the (social service) caseload is, we know what the education (cost projection) is. I need to meet with the governor’s staff and get buy-in from legislative leaders as well.”

Brownback and Republican leaders of the Kansas House championed the sweeping tax cuts in 2012, arguing that they would boost the Kansas economy and create jobs which, in turn, would stimulate more revenue for the state.

Sullivan conceded Monday that the economic growth needed to offset the immediate effect of the tax cuts has not yet materialized, although he continued to insist that it will show up.

“The wage increases and the job increases and the small business income increases take time,” Sullivan said. “Obviously from the profile you have, income (tax collection) is still less than before we cut taxes, but that’s a good thing.”

The revenue estimates come from the Consensus Revenue Estimating Group, a panel of economists from Kansas University, Kansas State University and Wichita State University, as well as both administration and legislative budget officials.

They meet behind closed doors, usually twice a year, to analyze economic trends in the state and project what total revenues will be for the current fiscal year and the next year. By law, their numbers must be used as the basis for the budget that the governor submits to the Legislature as well as the final appropriations bill the Legislature passes in the spring.

The previous estimates, released in April when lawmakers were debating this year’s budget, projected total revenue this year of $5.97 billion. The new estimates released Monday reduce that figure by $205.9 million, or 3.4 percent.

That includes a $239 million, or 9.5 percent reduction in expected individual income tax collections, along with smaller projected increases in a few other revenue sources.

Senate President Susan Wagle, R-Wichita, said lawmakers would do what is necessary to balance the state budget.

“While it’s difficult to predict a specific outcome, the state has an obligation to balance the budget,” Wagle said in a news release. “We will evaluate both the tax and spending side of the ledger to meet that obligation, once again, with Kansas families and taxpayers as our top priority.”