If Kansas maintains full funding for human-service caseloads and school financing — including the huge outlays for special education — the state’s budget will plummet into a deficit of $722.5 million within the next two years, according the state’s Consensus Estimating Group.

The group of economists and financial advisers met yesterday to reevaluate the status of the state’s budget situation. To remedy the $722.5-million hole, the state would have to make across-the-board cuts of 7.9 percent in fiscal year 2010 and 4.8 percent in fiscal year 2011.

Fiscal year 2010 began July 1, and already the state’s budget has regularly fallen below estimates, largely due to lagging personal income tax and corporate income tax receipts. The group’s new 2010 estimate is $258 million less than the original prediction, meaning the state can expect an additional deficit of at least $258 million in the remaining months of the fiscal year.

Democratic Gov. Mark Parkinson has already made cuts to the fiscal year 2010 budget including 2 percent allotments to most agencies. Parkinson responded to the new estimates in a statement issued yesterday by calling the new numbers “challenging” yet “manageable.”

Based on the latest estimates, either Parkinson or the Legislature is going to have to make even steeper cuts to make up for the additional $258-million gap, and Parkinson said he would be using his authority to make the necessary changes to eliminate the deficit.

“In the coming weeks, 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 in the statement.

Parkinson said he would consider “all the options” when making cuts to the fiscal year 2010 and fiscal year 2011 budgets.

House Majority Leader Ray Merrick, R-Stilwell, said he was very interested to see what type of changes Parkinson makes to close the 2010 gap and whether these cuts would affect K-12 education.

“I just don’t know how he can hold education harmless,” Merrick told Kansas Liberty.

School advocates have already started threatening to bring a lawsuit against the state if K-12 doesn’t receive the funding they have demanded. Merrick questioned how the districts would have enough funds to pay for the lawsuit if they were truly as strapped for cash as they have indicated.

“If they have enough money to sue the state, then they must have enough to spend,” Merrick said.

School districts would utilize taxpayer dollars originally meant to benefit students to fund the lawsuit, creating a unique situation in which state dollars would be used to sue the state.

Merrick suggested a massive consolidation of schools districts, with a large elimination of administrator jobs to offset budget cuts.

While education will be a hot topic this legislative session, tax increases will also be highly discussed as a mechanism for generating more revenue. Merrick said legislators, advocacy groups and Parkinson have already started their pleas for tax increases and that if these groups get their way, the state’s budget would continue to spiral out of control.

“We got ourselves into this problem by overspending, and now they want to fuel that problem,” he said. “It’s a vicious circle. Instead, we should make some cuts and finally get rid of these problems and get our budget under control.”

- Holly Smith

Resources:

State general fund revenue estimates

The Week in Review