Kansas revenue forecast more optimistic, but state still faces shortfalls

Storm clouds are still on the horizon for Kansas.

But new budget projections gave state officials a chance to share a slightly less ominous economic forecast on Thursday.

A group that includes state officials and economists said it expected total tax collections to increase by $156.4 million between the current fiscal year and June 2019.

The announcement was the first positive forecast released by the group in three years.

“Things are slightly better on some fronts,” said Shawn Sullivan, the state budget director.

But Kansas still faces almost $900 million in projected budget shortfalls over the next two fiscal years.

That means tax increases and budget changes will remain part of the conversation for Gov. Sam Brownback and the Kansas Legislature when lawmakers return to Topeka next month.

They have yet to reach a consensus on future budgets, a new school finance formula or a new tax plan that can become law.

They “still have a significant shortfall that needs to be addressed,” Sullivan said. “And then you have to add school finance on top of that.”

Lawmakers need to pass a new school finance formula by June 30 to satisfy the Kansas Supreme Court. The court ruled earlier this year that Kansas had failed to ensure adequate funding for public schools.

There “certainly remain big challenges for legislators and us between now and when the session ends,” Sullivan said.

The forecast was a marked improvement from the group’s last one in November, when it revised revenue estimates downward and projected budget gaps totaling more than $1 billion through June 2019.

In recent years, the state has had to revise revenue estimates downward and deal with shortfalls that led to budget cuts and other financial changes in the state.

Senate Minority Leader Anthony Hensley, D-Topeka, said in a statement Thursday night the revised estimates make it “more imperative” to override Brownback’s opposition to tax changes.

“This estimate adjustment doesn’t change anything,” Hensley said. “We still have a self-inflicted budget crisis, inherently unfair tax policies and underfunded schools.”

A spokeswoman for Senate President Susan Wagle, R-Wichita, was also cautious about the numbers making a significant change, saying “the revenue numbers were what we expected.”

“The Legislature clearly still has a lot of work to do to fill the budget hole before the end of this session,” said Morgan Said, Wagle’s spokeswoman. “Today’s revenue estimates do not change the course of action the Senate was already planning on taking.”

A bill signed by Brownback this week solved the state’s current budget gap of around $290 million through June of this year, though larger budget issues still remain.

Lawmakers’ decision to tap into sources of one-time money, like a long-term investment fund, helped them get through the current budget year ending in June.

This story was originally published April 20, 2017 at 5:56 PM with the headline "Kansas revenue forecast more optimistic, but state still faces shortfalls."