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Kansas sees more bad budget news in Nov. revenues

TOPEKA | The state's financial hole is getting deeper.

The latest bad news is smaller-than-expected revenue collections in November. General revenues for the month were 3.3 percent — or nearly $14 million — less than anticipated.

The Kansas Legislative Research Department's latest report on revenues came less than a month after state officials and university economists issued a new financial forecast. That prediction was more pessimistic than the one Gov. Kathleen Sebelius and legislators had used in making past budget decisions.

But it might not have been pessimistic enough, Alan Conroy, the Research Department's director, said Friday. The economy may be even weaker than the forecasters thought it was, he said.

"It was our best guess," said Conroy, who is one of the forecasters. "Unfortunately, in this environment, the situation is changing on a daily basis."

The state expected to collect nearly $410 million in revenues during November, including almost $181 million in individual income taxes, the largest source of general revenues.

But the state collected about $396 million in revenues. And individual income tax collections were less than $175 million — $6.2 million, or 3.5 percent short of the mark.

The Research Department's report cautioned against reading trends from a single month's worth of data. But Conroy said, "It is a concern."

"The weak point is individual income taxes," he said. "If the economy continues to weaken more than we anticipated, those numbers may be high."

General revenues from July 1, when the 2009 fiscal year started, through Nov. 30, were about $2.24 billion, again about $14 million short of expectations.

The Research Department already was projecting that the state would end the current fiscal year on June 30 with a $141 million budget deficit. It also has said that if the gap between anticipated revenues and current spending commitments isn't addressed, the gap will exceed $1 billion by June 30, 2010.

Sebelius already has asked agencies to draft recommendations for trimming 3 percent from their current budgets and told them to anticipate deeper reductions in fiscal 2010.

But some Republican legislators are criticizing the Democratic governor because she hasn't yet used her legal authority to impose cuts before the 2009 Legislature convenes Jan. 12.

Sebelius planned to spend the day in budget meetings, spokeswoman Nicole Corcoran said. The governor and her staff are preparing her recommendations for the next legislative session.

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