Kansas deficit to top $450M
ANTHONY S. BUSH/THE CAPITAL-JOURNAL
State looking at $70M shortfall this year, likely to exceed $450M in 2011
The Kansas government's revenue shortfall surged Friday beyond the $450 million threshold to place more pressure on lawmakers to raise taxes or cut spending to balance the budget.
A group of state fiscal analysts and economists met to revise tax revenue estimates for the current fiscal year ending June 30 and the subsequent fiscal year ending June 30, 2011.
Despite six rounds of spending cuts that reduced government expenditures by $1 billion during the past two years, the Consensus Estimating Group reported the recession's grip on tax revenue would require additional work to balance the budget.
The group concluded the Republican-led Legislature and Democratic Gov. Mark Parkinson must address a $70 million deficit in the current budget year. The deficit next fiscal year would be at least $450 million, but would escalate to $510 million if Medicaid and K-12 enhancements sought by the governor were included.
Alan Conroy, director of the Kansas Legislative Research Department, said the state's economic recovery so far remained "anemic" with corporate and individual tax receipts suffering. The problem reflects an unemployment rate expected to remain above 6 percent for months, he said.
"Jobs are lagging everywhere," said Duane Goossen, secretary of the Kansas Department of Administration. "The question is how fast might we then come off the bottom. It's quite possible that could be a bumpy road."
Lawmakers return to Topeka on April 28 to consider proposals for resolving the budget quagmire. The only certainty to emerge in the legislative session so far is that insufficient political support exists to resolve the shortfall exclusively with spending cuts or by simply raising taxes.
In January, Parkinson proposed a 1 cent increase in the 5.3-cent state sales tax, recommended a stiff increase in tobacco taxes and opposed more cuts in public safety, schools and social services. His plan would raise about $380 million annually.
"This hole is too big to fill with additional cuts," Parkinson said. "Instead, we must implement a temporary solution so that we can create lasting economic recovery. 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."
Some Senate Republicans proposed a budget that makes modest cuts but leaves open the possibility of a $360 million increase in state taxes.
"Balancing the budget will be a daunting task of historic proportions," said Senate Majority Leader Derek Schmidt, R-Independence. "There is no good or popular option that will get the job done."
Senate Minority Leader Anthony Hensley, D-Topeka, said the Legislature should consider raising the sales, tobacco and liquor taxes and reform the Kansas income tax structure to increase revenue. He said it was unfair for Kansans earning $60,000 a year to pay the same tax rate as Kansans making $6 million, he said.
The House Republican leadership endorsed a plan to slash expenditures to fix the problem, including a $200 million reduction to K-12 education.
"This doesn't require a tax increase," said Rep. Kevin Yoder, an Overland Park Republican and chairman of the House Appropriations Committee. "Would a tax increase help small businesses start hiring again? I don't think so."
House Democratic Leader Paul Davis, D-Lawrence, said legislators had wasted enough time avoiding "tough choices that we knew were inevitable."
"Public schools, higher education institutions, the disabled and many other Kansans who rely on essential services cannot afford a seventh round of devastating cuts," Davis said. "More than ever, Democrats and Republicans need to put partisanship aside and come together to tackle this budget crisis."
Schmidt picked up on that bipartisanship theme.
"The spirit of compromise needs to prevail in the days ahead," he said.
No comments:
Post a Comment