Chairman of House Appropriations Committee predicts $100M in budget adjustments necessary

? The chairman of the House Appropriations Committee said Tuesday that Gov. Sam Brownback and the Kansas Legislature may have to find as much as $100 million in budget adjustments during the current fiscal year to avoid ending the year with a negative balance.

“I’m guessing we’ll be about $100 million negative,” said Rep. Ron Ryckman Jr., R-Overland Park.

Ryckman spoke by phone Tuesday, the day after the Kansas Department of Revenue reported that tax revenues in October came in $11 million below official estimates. That put the cumulative shortfall for the fiscal year at about $77.9 million, almost the exact amount that state budget officials had expected to carry over at the end of the year.

“I think we’re at or below zero,” Ryckman said, referring to the projected ending balance now.

The Kansas Constitution requires the Legislature to raise enough revenue to pay actual expenses of the state for two-year cycles. But if revenues are not sufficient to cover those costs, statutes give the governor authority to make what are called “allotment” cuts.

Under that law, whenever the budget director and secretary of administration certify that they believe the state will end the year with a negative balance, the governor can make targeted cuts to the budgets of executive branch agencies in order to bring the projected ending balance above zero.

Lawmakers also gave the governor additional flexibility this year with a provision in the main budget bill that allows him to transfer $100 million from other funds into the state’s general fund in order to shore up its balance. In July, though, Brownback used about $45 million of that authority.

Administration officials have not commented on the October revenue numbers since they were released Monday. But legislative officials said the key to any decision they make will be another report due out Friday, when new revenue estimates are released.

That new report will give an updated picture of how much money the state expects to take in this year, plus the first estimate of how much is expected for the next fiscal year, which begins July 1.

Most analysts are expecting a downward revision when those new numbers come out because sales tax revenues have fallen short of the current estimates for six months in a row and because declining oil and gas prices have cut into the amount of severance tax the state collects.

Officials in the Legislature’s nonpartisan Research Department said the governor may not be legally required to make allotment cuts. He could, for instance, wait until lawmakers return in January for the 2016 legislative session.

However, by law, he must use the new revenue estimates that come out Friday as the basis for the budget proposal he sends to the Legislature, which will include revisions to both the current year’s budget and the budget for the following fiscal year.

And that could put lawmakers in the position of having to either make deep budget cuts or raise taxes, either of which are likely to be unpopular going into an election year.

“It depends on how the governor addresses it,” Ryckman said. “He has some transfer authority. He has a lot of flexibility. It just depends on how he decides to address it. There’ll be less speculation after we see what our consensus revenue guys do this weekend.”

Ryckman said he expects a decision to be made Monday or Tuesday of next week about whether Brownback will start making allotment cuts.