Tuesday, November 11, 2014

Now It’s Official: The Kansas Budget is Crashing

By Duane Goossen

It is now official: Kansas must make deep budget cuts yet this fiscal year just to stay financially solvent.

The state’s revenue estimators met Nov. 10 and significantly lowered the official outlook for the amount of income that Kansas is expected to receive.

The new forecast released yesterday shows receipts far below expenses.

First, look at fiscal year 2015.

Expected revenue — plus the beginning balance in the state bank account — total $6.148 billion.

Approved spending plus additional costs required to pay for Medicaid and school finance total $6.427 billion.

Even after completely draining the reserves in the state bank account, $279 million must still be cut from already approved spending just to keep the state solvent.

However, that's a small problem compared to the next two years.

Think about this: while the state budget is in serious trouble now, expenses will continue to grow next year. At the very least, the state will need to add $76 million for Medicaid costs in FY 2016, and another $52 million to cover commitments to the state retirement program, according to projections by the nonpartisan Kansas Legislative Research Department. (Not to mention, the state should also be planning for more students in school, higher costs for road maintenance, and salary increases for state employees.)

But what is the official forecasted revenue for FY 2016 from yesterday's report? $5.811 billion.

For FY 2017? $5.877 billion.

Remember: current expenses are $6.427 billion. Costs are growing. Revenue is falling. And even more tax cuts are scheduled to take effect.

It’s not possible to sugarcoat this. The current set of Kansas services must be dramatically downsized.

Here’s the saddest part: Everyone is now on defense. Advocates for public education, higher education, human service programs, public safety, and highways will all be working hard to defend what they have.

All of the state’s political energy will go toward figuring out how to constrict and pull back. No one will be thinking about things like offering a world-class education to Kansas students or otherwise investing in the state's future.

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