DALLAS — Kansas’ projected expenditures will outstrip revenues by almost $500 million in fiscal 2012 under a new financial forecast released Tuesday by the official Consensus Estimating Group.
The latest estimate by the panel of state budget experts and university economists puts fiscal 2012’s total receipts at $5.81 billion, up slightly from an estimated $5.79 billion in fiscal 2011.
However, expenditures in the next fiscal year are estimated at $6.2 billion, based on current spending levels, expected increases in Medicaid and other social programs, and accounting for a $60 million shortfall at the end of fiscal 2011.
State budget director Duane Goossen, one of the members of the revenue panel, said the estimated $492 million gap between tax collections and spending can be attributed entirely to the loss of federal stimulus funds after fiscal 2011.
Lawmakers could cover almost $424 million of the expected shortfall by transferring funds from the Department of Transportation and other state agencies, and tapping gambling revenues, Goossen said.
Previous legislatures have transferred funds to balance the budget, but the fiscal 2011 budget ended that practice. The current budget plan calls for those borrowed funds to be repaid in fiscal 2011.
If the fund transfers and other budget-balancing maneuvers are not allowed in fiscal 2012, Goossen said, expenditures must be reduced to balance the state budget. Governor-elect Sam Brownback said during his campaign that he would freeze state spending at current levels if revenues are not sufficient.
“There are a fair number of areas that we can no longer afford to do, that are not a core function of government,” Brownback said.
He also promised to eliminate the practice of balancing the budget by borrowing from state agency funds to replenish the general fund.
Brownback and his fellow Republicans will hold all statewide elected positions in the executive branch when the 2011 Legislature meets in January, the first time since 1965 that one party has done that. Republicans also will fill 92 seats in the 125-member House and 31 in the 40-member Senate.
The revenue shortfall would increase by $327 million if the school funding plan were to be fully funded, the revenue panel said. The plan calls for state aid in fiscal 2012 of $4,492 per pupil, but the budget assumptions in the forecast sets per-pupil funding for fiscal 2011 and 2012 at the fiscal 2010 level of $4,012.
The revenue panel raised its estimate for fiscal 2011 revenues by $18 million from the April report, because of an increase in the state sales tax to 6.3% from 5.3% that went into effect July 1. The estimated $5.785 billion in fiscal 2011 revenues is up 11.4% from actual fiscal 2010 revenues.
“This is the first time in a long while that we have revised an existing budget upward,” Goossen said. “We’ve bottomed out and are starting back up.”
The fiscal 2011 estimate includes total tax receipts of $5.6 billion, including $2.86 billion in state income tax collections, $2 billion from the retail sales tax, and $280 million from the use tax.
The panel expects $5.84 billion in total tax receipts in fiscal 2012, including $3 billion from the state income tax, $2.1 billion from the retail sales tax, and $295 million from the use tax.
Actual revenues in fiscal 2010 totaled $5.2 billion, with $2.7 billion of income tax collections, $1.62 billion from the retail sales tax, and $205 million from the use tax.