State finances even bleaker

The state’s budget outlook grew bleaker last week.
The state’s budget outlook grew bleaker last week.

The sun is not shining in Kansas – at least not on the state budget.

But the election of more than 50 new state lawmakers offers a ray of hope for a needed course correction – with or without the cooperation of Gov. Sam Brownback.

The state’s budget outlook grew bleaker last week. New official forecasts lowered revenue projections for the rest of this fiscal year by a stunning $345.9 million – a 5.5 percent drop from the previous estimate.

Next year is even worse: Total revenue is expected to drop another $443.7 million, or 7.4 percent. That could result in the budget gap that year of about $580 million.

What makes the situation especially dire is that the state already burned through all its ending balance reserves, so it has no financial cushion. Plus, Brownback and lawmakers already raided about all they can from the state highway fund this fiscal year.

And then there is the likelihood the Kansas Supreme Court will rule that the state is inadequately funding K-12 public schools – potentially by several hundred million dollars.

In other words, it is a huge hole that could get even deeper.

This fiscal mess is one of the main reasons about a third of the members of the Legislature will be new next year.

Many conservative incumbents who backed Brownback’s fiscal policies lost either in the August primaries or Tuesday’s general election. As a result, the majority of lawmakers next session will be moderate Republicans and Democrats.

Most of these new lawmakers campaigned on repealing all or parts of Brownback’s tax cuts. They particularly object to the tax exemption on pass-through business income.

Such changes are needed to help rebuild the state’s finances, but they likely won’t be enough to cover all the shortfall. Another challenge is that it could take a while for the tax changes to go into effect and for the state to see the higher revenues.

In the short term, there aren’t many options other than cutting spending. And that’s a grim prospect, as state agencies and universities already are struggling with reduced or flat funding.

Brownback also isn’t helping. He is not planning to outline budget cuts until the Legislature convenes in January.

That’s a mistake and an abdication of leadership. The longer the state waits to make cuts, the harder they could be to implement.

The new lawmakers realized the state was in bad shape when they ran for office. But they likely weren’t expecting to learn – two days after the election – that it was this bad.

They may now be wondering what they got themselves into. Voters should be wondering why they didn’t throw out more of the incumbents who created this mess.