Kan. Group Cuts Revenue Forecast $235M

A group of economists and policy-makers slashed Kansas tax collection estimates Thursday by $235 million, reflecting signs of continued weakness in the state economy.

The new forecast for the remainder of the state's 2010 fiscal year through next June 30 means Kansas government will have 4.2 percent fewer tax dollars to finance services, including public education, than previously estimated in April. Kansas began its fiscal year July 1.

That means Democratic Gov. Mark Parkinson and legislators will have to trim as much as $460 million from the budget approved earlier this year to break even. The Kansas Constitution prohibits the state from ending a fiscal year in debt.

"The recession in Kansas is not over in the current fiscal year," said Alan Conroy, director of the Kansas Legislative Research Department and member of the estimating group.

Parkinson issued a statement, calling the forecast a a challenge, but manageable.

"In the coming weeks, I will take whatever steps are necessary to balance the 2010 budget before the Legislature returns," Parkinson said in a statement. "That is a promise I have made, and it is a promise I will keep."

He said all he asked in return was for legislators from both parties to act "like civil adults" and work together to solve the budget. He gave no time frame for announcing his reductions.

Budget Director Duane Goossen said Parkinson would be looking at making close to $260 million in cuts, a lower figure that doesn't include additional money for schools with increased enrollments, lower property tax valuations or additional funding for students in poverty.

Forecasters did project a 2.5 percent increase in tax revenues for fiscal year 2011, but cautioned that the growth will be slow coming as Kansas continues to feel the effects of the recession.

Raising taxes to close the gap isn't an option for a number of reasons, said Sen. Jay Emler, chairman of the Senate Ways and Means Committee. While tax increases aren't a good solution in a recession, he said the impact of those cuts would come too late to solve the immediate problem.