Revenue Estimates are down again

Here is an article from the Topeka Daily Capital published on Saturday, April 17. Revenue estimates are again down.  But maybe, the recession has bottomed out.
Revenue outlook: a $70M shortfall

New forecast for Kansas budget is a downward change; gap could still grow.
By John Milburn - Associated Press Writer

TOPEKA -- A new revenue forecast issued Friday estimated a $70 million shortfall in the state budget year that ends June 30, meaning lawmakers and the governor will have to enact deeper spending cuts, delay payments or use additional federal stimulus money to balance the budget.

"The downward revision only makes the budget hole we have been working with larger," said state budget director Duane Goossen. "It's still a situation that can hopefully be managed."

The projected gap for the 2011 budget, which begins July 1, is now $450 million, but could grow to $510 million depending on how state officials solve the current year problem.

The figures released Friday reflect a downward revision in current year tax collections of $104.4 million from the November estimate. Leading that decline is further erosion in Kansas individual income tax collections, a reflection of the state's 6.9 percent unemployment rate for March.

Alan Conroy, head of the Kansas Legislative Research Department and member of the group that issued the revenue forecast, said labor officials predict the Kansas jobless rate will remain near the current level for the next year. That's well above the historical average of 4 percent unemployment for the state.

"There are flickers of hope. At best, the economic recovery is anemic," Conroy said.

Goossen said the new figures suggest Kansas revenue declines have bottomed out after three years of reductions. The new estimate is for tax collections to grow in 2011 by 3 percent, or some $154.3 million.

Democratic Gov. Mark Parkinson issued a statement saying the gap is too large to close with spending cuts alone without harming schools, public safety and social programs.

"Instead, we must implement a temporary solution so that we can create lasting economic recovery," Parkinson said. "That's why I reiterate my call for the Legislature to return to Topeka at the end of the month prepared to raise the revenue we need to prevent permanent damage to the foundation of our state."

The Republican-controlled Legislature returns April 28 to finish its work for the year. Neither the House nor Senate has approved a budget for 2011, nor any plan for new revenues to make it balance.

Parkinson has proposed $380 million in tax increases, including raising the state sales tax rate, but the plan has found little Statehouse support. His budget plan also includes small increases in K-12 education funding and the state receiving additional federal dollars.

Senate Majority Leader Derek Schmidt said finding a solution will require a bipartisan compromise among legislators and Parkinson.

"Balancing this budget will be a daunting task of historic proportions. There is no good or popular option that will get the job done," said Schmidt, an Independence Republican.

The Senate Ways and Means Committee will start working on its budget Monday and then turn to tax proposals.
Revenue outlook: a $70M shortfall
New forecast for Kansas budget is a downward change; gap could still grow.

By John Milburn - Associated Press Writer