New forecasts offer little help
Lawmakers hoping new state revenue estimates would help bail them out of their budget problems were disappointed last week.
Though the revenue estimates are up slightly – and “up is better than down,” as state budget director Shawn Sullivan noted – the increase barely made a dent in the state budget shortfall.
What’s more, there are “storm clouds on the horizon,” warned Raney Gilliland, director of the Legislative Research Department.
The state’s revenue forecasters expect the state will collect about $63 million more this fiscal year than the previous estimate, or a 1.1 percent increase. They also projected a $43 million, or 0.7 percent, increase in revenue next fiscal year, which starts July 1, and a $51 million, or 0.9 percent, increase for the 2019 fiscal year.
That reduces the projected budget shortfall over the next two fiscal years from about $1 billion to about $900 million. Not a huge drop, but it certainly helps.
But there are important caveats and concerns.
The big one is that the shortfall doesn’t include additional funding for K-12 public schools, as ordered by the Kansas Supreme Court. A House bill would increase school funding by $150 million each year over the next five years, but that is unlikely to satisfy the court.
Also, lawmakers have already used up most of the gimmicks and one-time money that papered over previous shortfalls. For example, Gov. Sam Brownback signed a bill last week that plugs the state’s current budget gap of about $290 million by borrowing money from the state’s long-term investment fund. There also is a limit to how much money lawmakers can raid from the state’s highway fund, which has been their go-to budget Band-Aid in recent years.
Another big concern is the state’s economic outlook.
“We are noting a decrease in manufacturing employment in the Wichita area,” Gilliland said. “In addition to that, there have been other layoffs, bankruptcies, closures or possible closures across the state, but especially here in Topeka.”
The new estimates also forecast only about 1.4 percent growth in retail sales tax collections over the next two years, the Lawrence Journal-World reported.
In other words, the “shot of adrenaline” that Gov. Sam Brownback promised still hasn’t happened – and it is not expected in the near future.
As a result, when lawmakers return to Topeka on May 1, they will have to cover the budget shortfall the old-fashioned way – through budget cuts and tax increases.
This story was originally published April 23, 2017 at 5:06 AM with the headline "New forecasts offer little help."