Kansas’ Declining Revenue Raises Risk of Additional Budget-Slashing

DALLAS — Kansas Gov. Mark Parkinson said he may be forced to make additional cuts to the fiscal 2010 budget as revenue continues to fall faster than expected.

The Department of Revenue said on Monday that general fund revenue in February totaled $195 million, down 27% from the projected $266 million. The $71 million shortfall in February brings the decline in the last three months to $105 million below November’s official forecast by the state’s Consensus Estimating Group.

Parkinson has already cut some $1 billion from the fiscal 2010 budget that was approved in early 2009, and said in early February that additional cuts would curtail necessary state services. He proposed a temporary 1% increase in the state sales tax to increase revenues, but the proposal died in the Legislature.

However, Parkinson said all budget-balancing options are now being considered.

“The February revenue results are bad,” the Democratic governor said after the report was released. “We will overcome these challenges by not panicking and by making responsible decisions.”

The said he would study the numbers, and present a plan for dealing with the revenue shortfall by the end of the week.

“None of the options are good, but we will keep our composure, make the best decisions we can, and eventually, we will work our way out of this recession,” he said.

General fund revenue for fiscal 2010 through January was $2.97 billion, $301 million below the same period of fiscal 2009.

The expected shortfall in fiscal 2011 is about $416 million, but that could rise based on the current, unexpected drop in state revenue.

In November, the Consensus Estimating Group lowered its revenue estimate for fiscal 2010 to $5.3 billion, down $235.2 million from its April estimate. The latest revenue estimate for fiscal 2011 is $5.18 billion.

The Kansas constitution requires a balanced budget by the end of the state’s fiscal year on June 30.

State budget director Duane Goossen on Monday said the state did not send $200 million in monthly aid to 293 local districts at the end of February due to falling revenue. He said $100 million probably would be distributed by the end of the week but the other $100 million might not be sent until the end of the month.

The state has delayed public school payments since November. Goossen said payments could be delayed through April, when state income taxes are due. He said the state continues to defer January’s quarterly $70 million contribution to the schoolteachers pension fund.

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