DALLAS – The Kansas Department of Transportation will take a $25 million cut under budget-balancing proposals from Gov. Sam Brownback.
Brownback's plan calls for $105 million in spending reductions and $116 million in additional revenue to cover a deficit caused by falling revenues in five of the first six months of the fiscal year.
Even after reducing revenue estimates in November, the state expects a $19 million shortfall in the current fiscal year that ends June 30 and $175 million in the next fiscal year.
The budget adjustments come after Brownback welcomed state legislators back to Topeka in his State of the State address Jan. 12.
While taking aim at traditional conservative targets such as Planned Parenthood and terrorism, Brownback largely ignored the state's worsening financial condition.
"We have controlled spending, reformed tax policy, and reduced burdensome regulations," Brownback told lawmakers. "We have consolidated agencies, eliminated wasteful programs, and overhauled workers compensation."
Brownback, who once said that his "experiment" of cutting income taxes would lead to economic growth, cited evidence of success in that effort.
"Working together, we've created an economic environment that has seen Kansas gain more than 78,000 private sector jobs and achieve its lowest unemployment rate in 14 years," he said.
"Working together, we've created an economic environment where hard-working Kansans have seen their wages increase more than 10%," he added. "Working together, we've created an economic environment where new filings for businesses increased by 15%."
In 2015, the Legislature passed and Brownback signed a massive revenue package that increased taxes to raise $400 million. However, revenue has continued to underperform estimates.
As revenue continued to fall below estimates, lawmakers questioned the consensus revenue estimating process. Sen. Jeff Melcher, R-Leawood, suggested the budget proposal would not be enough to balance the budget.
An updated revenue forecast will be issued in April, and some lawmakers anticipate the forecast will once again be lowered.
In criticizing the Brownback plan, the Kansas Center for Economic Growth referred to it as "tax-cut fantasy."
"While proponents of the tax cut fantasy proclaimed that job growth would be near-immediate – and still maintain that Kansas' economy is doing great - reality shows that Kansas' job growth is still in the back of the pack since the tax cuts went into effect," the center wrote.
"Since passing unprecedented and unaffordable tax changes in 2012 and 2013, Kansas has burned through its savings account, repeatedly relied on one-time sources of money for budget fixes, and struggled to make revenue projections," the center said. "The legislature and governor can take a first step to remedying our ongoing revenue issues by fixing Kansas' failed tax policy, starting with the loophole that exempts 330,000 Kansans from paying income taxes."
