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Posted on Fri, Nov. 06, 2009

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Shortfall in budget nears half a billion

BY JEANNINE KORANDA

Eagle Topeka bureau

TOPEKA — The state will have to cut at least $258.8 million to balance the current budget by the end of the fiscal year, revenue estimators said Thursday.

The state is expected to bring in about 4.2 percent less in 2010 than forecast in April — or $235.2 million less, the Consensus Revenue Estimating Group said.

The projected minimum budget cut doesn't include an estimated $155 million that public schools are likely to need to cover increased student populations, special education and a jump in students qualifying for free or reduced-price lunches. That number swells the cuts needed to balance the 2010 budget, which ends June 30, to $459 million.

Not including the additional money for schools is the equivalent to cutting about $150 from per-pupil state aid, said Alan Conroy, director of the Kansas Legislative Research Department.

No matter which number is used, "it's a tremendous hole," said Sen. Jay Emler, R-Lindsborg, chairman of the Senate Ways and Means Committee, which handles the budget.

Either number is likely to result in more cuts to public schools. More than half of Kansas' tax revenue — nearly $3 billion under the current budget — go to the state's 293 school districts as aid.

Mark Tallman, lobbyist for the Kansas Association of School Boards, said his group has been warning members to expect cuts double or triple what they had seen previously.

That warning could make mid-year cuts easier than they would have been last year when the downturn was a surprise, but deeper cuts would affect gains in student achievement, he said.

Deeper cuts also would increase the likelihood of another lawsuit over school finance, he said.

"Probably starting this year but certainly for next year there are going to be fewer districts, fewer schools — we are already seeing that — fewer teachers, fewer days in the school calendar," Tallman said. "It is just a question of how much."

Despite the bad news, revenue estimators do expect the state to start to crawl out of the current slump in the next year.

"The recession in Kansas is not over in the current fiscal year, but there are signs of recovery and we are anticipating those signs will increase as we get to 2011," said Alan Conroy, director of the state Legislative Research Department.

Still, the initial revenue estimate for fiscal year 2011, which begins July 1, is $122.2 million, or 2.3 percent, below the current year's revised estimate of $5.3 billion.

The 2010 budget has already gone through four rounds of cuts. The last round was ordered by Gov. Mark Parkinson, a Democrat, in early July.

In a written statement Thursday, Parkinson said again that lawmakers would face a balanced 2010 budget when they returned to Topeka for the session in January.

"I will take whatever steps are necessary to balance the 2010 budget before the Legislature returns; that is a promise I have made, and it is a promise I will keep," Parkinson said.

He did not outline what those cuts might look like but advocated taking a "calm and measured approach."

"These deficit numbers are challenging, but they are manageable," he said.

Given that the budget has been cut repeatedly, some lawmakers are suggesting tax increases should be discussed.

"We are not in the same place that we were last year. We've made difficult and painful cuts," said House Assistant Minority Leader Rep. Jim Ward, D-Wichita. "We have to realize and recognize that people have made sacrifices."

If tax cuts are not considered, then the state should at least consider not reducing taxes, he said.

Emler said he expected to hear arguments on both sides of the tax question. He pointed out that increasing the income tax would not help the immediate revenue problem because the taxes would not go into effect immediately.

"I suspect there will be some pressure to do something with sales tax. Whether or not there is the will to do something with sales tax is another story," he said.

Contributing: Associated Press Reach Jeannine Koranda at 785-296-3006 or jkoranda@wichitaeagle.com.