Posted on 11/11/2014 8:41:14 AM PST by SoFloFreeper
State revenue forecasters said Monday that the state can expect hundreds of millions of budget dollars less than previously thought to fund schools, social programs and highway projects.
The consensus revenue estimating group lowered the official projections it made in April by $205 million. If accurate, the revised forecast means that Gov. Sam Brownback and legislators will have to raise taxes or make deep cuts in spending during the remaining seven months of the budget year to avoid a $278 million deficit. Additional cuts will be necessary to prevent a $435 million deficit in the next budget year, the analysts said.
In May, Kansas legislators and Brownback approved a budget of about $6.3 billion for the fiscal year that started July 1. That was already more than the state was projected to collect, but a healthy reserve fund was expected to cover the difference. However, lagging tax collections will force the state to spend through its reserves and cut spending.
Budget Director Shawn Sullivan said he was not counting on any tax increases. Instead, he said, the Brownback administration would focus on curbing state spending.
The state of Kansas must continue to live within its means, just as families do every day, Sullivan said.
Sullivan said he would begin working on a menu of options for reducing the budget and discuss with Brownback whether the cuts can wait until the Legislature reconvenes in January. If not, the governor could use his allotment authority to start cutting before then.
Both of those are options, Sullivan said.
Sullivan said he had already identified $100 million in efficiencies that can be implemented without reducing services. He also said the projected deficit in the current budget year is based on the state restoring some programs that it hasnt funded in recent years. He cited the local ad valorem property tax reduction fund as an example. It was once used to help lower county property taxes.
It would be probably fairly reasonable to suggest if we havent funded LAVTR in 10 years and counting, we probably arent going to start now, Sullivan said.
Several factors led the forecasters to lower their projections. The income tax cuts championed by Brownback forced the biggest adjustment.
It's fair to say estimates in April missed the marks, Sullivan said.
A 2012 plan that Brownback spearheaded dropped state income tax rates and eliminated the income tax for owners of about 191,000 businesses organized as LLCs, sole proprietorships or other forms that produce pass-through income.
Sullivan said a one-time drop in taxes paid on capital gains caused by a change in federal tax policy was more to blame for the drop in revenue than structural problems with the Brownback tax plan.
Senate Minority Leader Anthony Hensley, a Topeka Democrat, disagreed.
This is the budget crisis that was self-imposed by Governor Brownback and the Kansas Legislature, Hensley said.
Hensley called the new projections devastating and said the budget crisis was far more serious than I had even thought.
He said the governor and Legislature could not close the gap without affecting government services.
Theyre going to have to cut school funding, raid the highway fund and very likely have to cut social services, Hensley said. There are some very difficult decisions ahead.
Sullivan said economic growth eventually would close the budget gap, even as more tax cuts are set to automatically kick in during the next five years.
The state also ran sudden deficits during the national recession that began in 2008. Then-Gov. Mark Parkinson reduced spending and raised taxes to deal with the drop-off in revenues.
An infusion of federal dollars prevented deeper cuts then, said Raney Gilliland, director of the nonpartisan Kansas Legislative Research Department.
Its not a national phenomenon, so I dont expect the federal government to come to our rescue this time, Gilliland said.
Editorial whining is beginning to happen today ALL OVER Kansas media outlets....as Sam Brownback was re-elected last week and the people will get to keep MORE of their hard earned money.
Ask yourself how many of the liberal pundit whiners, wringing their hands over school budget cuts, are going to WRITE CHECKS from their own personal accounts to help the school in their neighborhood.
Then cue the crickets and watch the tumbleweed roll.
I think that’s called effective governance. Refocus on the core services and cut the fat. It’s how the real world works outside of government fantasy land.
I'm sure some voters would have liked .Gov to have released such forecast before the election.
First off, I’d like to know what the hell a “consensus revenue estimating group” is and is it in any way shape or form related to a “settled science” consensus.
Timing to me seems to a bit retaliatory in nature given recent election events.
IOW, check this sh!t out and vet the “group”.
“...make deep cuts in spending during the remaining seven months of the budget year to avoid a $278 million deficit.”
“...approved a budget of about $6.3 billion for the fiscal year...”
“Deep cuts” are 4.4% of the budget? LOL. They can probably cut 4.4% of their budget by aggressively reducing the amount of office supplies taken home by state workers.
If Brownback had done what the Left advocated, he’d have been chucked out to the unemployment line like Tom Corbett.
Getting government under control is a thankless job.
...make deep cuts in spending during the remaining seven months of the budget year to avoid a $278 million deficit.
A budget of $6.3 BILLION with a deficit of $278 million is a shortfall of less than 4.5%.
Yes, the libs think that less than 4.5% is equal to DEEP cuts. Of course, an INCREASE of 4.5% in taxes would be described by these same libs as a "minimal cost".
Before I saw your post, I did the math too and just posted about it!
In a sense, this is the same thing that tripped up Tom Corbett in PA.
He pulled in the reins on spending, trying to ride things out without a tax hike for a year or two until the economy recovered.
Only under Obama, it never really recovered. The schools went 3, 4 years without an increase in state funding. Local school boards started hiking their property taxes (which, astoundingly enough, they got away with blaming on Corbett).
Then when transportation issues reached a crisis phase he hiked the gas tax, and that sealed his fate.
I would advise Gov. Brownback to hold firm and to not repeat those mistakes.
Kansas has a $6 billion budget.
$200 million is 3% of the total.
I guess “deep” is not as deep as it used to be.
No problem. It’s a point that bears repeating.
Get rid of government vehicles for personal use
Put every penny of spending online for citizen review
Stop funding the arts
Stop state licensing of professions and turn it over to a private entity to offer guarantees of competency and excellence.
Medicaid, welfare and any state entitlement payments should stop at 100% of federal poverty levels
Stop double dipping at the state trough when workers retire from one state agency and then go to work at another state agency for a second pension.
Imagine that, the government will have to live within its means.
Actually, the airwaves and print were plastered with that info by his opposition. Any Kansan that didn't know that there would be a fall off in government tax collect wasn't paying attention.
Key quotation: “State revenue forecasters said Monday that the state can expect hundreds of millions of budget dollars less than previously thought...”
It is a great scam to first makeup a number then proclaim a crisis when the number is not met. The liberals can never lose at that game. So the key thing is to not accept the premise.
As with any budget crisis I will reserve judgment until I see the following:
1. Previous 10 years of actual expenditures
2. Previous 10 years of actual revenue
3. Current year projected revenue
This will help me determine if we are talking about budget cuts versus spending cuts.
“the government will have to live within its means”
The government has no “means”. Just what it loots from taxpayers.
Yes, but usually the politicians loot more when the government spends more than it is allocated.
Wait, where’s the bad news?
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