DALLAS - Kansas would spend less in fiscal 2009 and 2010 as a result of reduced revenue under proposed budgets submitted to the Legislature on Tuesday by Gov. Kathleen Sebelius.
The governor said the revised budget for fiscal 2009 and the proposed budget for fiscal 2010 would be balanced without tax increases through elimination of underperforming programs, a hiring freeze, and closing of marginal state facilities.
However, her plan calls for the suspension of mandated phase-outs of the state's estate tax and corporate franchise tax that were scheduled for fiscal 2010.
Republican leaders in the Legislature said they favor across-the-board cuts, no tax hikes, and retention of the tax phase-outs that Sebelius proposes to halt.
House Republicans said they intend to propose soon a revised fiscal 2009 budget with $300 million in cuts. Senate Majority Leader Derek Schmidt, R-Independence, said the current shortfall must be dealt with before the fiscal 2010 problem can be solved.
Sebelius is a Democrat, but Republicans control both houses of the Legislature. The governor said earlier she would veto a budget-balancing plan that relied on across-the-board cuts.
The Legislature convened Monday for a 90-day session.
The budget plan freezes basic state aid to public schools at the level in the fiscal 2009 budget adopted by the Legislature in 2008 of approximately $3.2 billion a year. Appropriations for higher education would be reduced from $830 million in fiscal 2009 to $773 million in fiscal 2010.
State aid to cities and counties would be cut by $125 million in 2010.
The revisions would avoid a predicted shortfall of $142 million in fiscal 2009, Sebelius said, and a looming deficit of $944 million in fiscal 2010.
However, the latest revenue figures from the Kansas Legislative Research Department indicate the shortfall in the current fiscal year could be almost $200 million. The next official revenue projection will be released in mid-April.
The proposed executive budget would cut general fund spending by $101 million in fiscal 2009 and by $431.3 million in fiscal 2010. Fund transfers and program suspensions would provide an additional $100 million to the general fund in fiscal 2009 and $310 million in fiscal 2010.
The 2008 Legislature appropriated $15 million a year over the next two fiscal years to finance a new pharmacy school at the University of Kansas, but Sebelius would replace those appropriations with $30 million in additional bonding capacity for the university.
Total state general fund expenditures in fiscal 2009 would be $6.35 billion, down from $6.45 billion in the original 2009 budget. Revenues for the year are expected at $6.41 billion, leaving an ending balance estimated at $58.3 million.
Expenditures from the general fund in fiscal 2010 in the governor's proposal almost exactly match anticipated revenues of $6.15 billion, with an ending balance of $600,000.
Total state expenditures in fiscal 2010 under Sebelius's proposed budget would be $12.9 billion. The general fund accounts for about 48% of the total state budget.
