On Friday the Kansas Consensus Revenue Estimating Group met and released their estimate of revenue for the remainder of the current fiscal year and the next. (The current fiscal year is 2010, which ends on June 30, just about 2.5 months from now. Fiscal year 2011 starts on July 1.)
Revenue estimates for both years were revised downwards. For the remainder of fiscal year 2010, the revenue estimate was revised downwards by $46.4 million, or 0.9 percent from the November estimate. For fiscal year 2010, the number was revised downward by decreased by $83.8 million, or 1.6 percent from November’s estimate.
These numbers are important because they are the numbers that the legislature, by law, has to work from when it reconvenes on April 28. Having a common set of numbers to work with means that arguments as to whose estimates of revenue are correct are avoided. Some degree of politicization of the budget is eliminated.
The release of the revenue estimates caused Kansas Governor Mark Parkinson to release a statement that read, in part: “This estimate confirms what we have predicted since the start of the year — despite having already cut more than a billion dollars in state spending, Kansas still faces a $510 million budget shortfall. This hole is too big to fill with additional cuts. $510 million in cuts would decimate our schools, public safety programs and safety net services for our most vulnerable Kansas.” This was followed by a reassertion of his proposal to temporarily increase the sales tax by one cent on the dollar.
The governor said that cuts in spending would “decimate our schools.” This is contraindicated by noting that USD 259, the Wichita public school district, found a way to save $2.5 million per year by adjusting school starting times, thereby saving on transportation costs. Undoubtedly more savings like this can be found.
Not everyone agrees with the governor’s numbers and the need for a tax increase. Two weeks ago the Kansas Policy Institute placed a newspaper advertisement that explained some of the problems with the governor’s facts and his promotion of a tax increase. The numbers cited in the ad are a little different now that we have the recent revenue estimates, but the points are the same: The purportedly large “gap” is based on what the governor wants to spend, not what needs to be spent. There are many ways to save money, and tax increases will harm Kansas.
Following is the text of the Kansas Policy Institute ad:
With all due respect Governor Parkinson, your claims about state spending and your premise for tax increases simply aren’t true.
First of all, the primary cause of the budget “gap” isn’t to prevent drastic cuts to state spending, it’s that you want to increase state spending by $380 million.
Your proposed general fund budget of $5.831 billion is 7% higher than your estimate of FY 2010 spending and $1.1 billion more than we spent in FY 2005. The state provided good services when we spent a billion dollars less and it’s disingenuous to claim that we couldn’t possibly spend less without devastating the ability to meet taxpayers’ needs.
The true “gap” is $122 million, which is the amount that revenues are predicted to decline next year. There are many viable options to cover the revenue shortfall without raising anyone’s taxes or eliminating services. Here are just a few:
- Sell some state property. Some legislators already have a plan in place that could generate up to $150 million.
- Pay schools sooner (and on time) so they don’t need large carryover cash balances to pay their bills, freeing up a large portion of nearly $700 million.
- Privatize some services and functions. Private sector employers can do a job for less money and the services would still be available.
There are many more examples listed on our web site at www.KansasPolicy.org.
The Kansas economy is already absorbing $163 million in higher unemployment taxes, which is predicted to cause further job loss. Raising other taxes will cost more jobs and do further damage to the economy. We can maintain current state spending without raising anyone’s taxes, and we respectfully ask that you adopt that common-sense approach and drop your demand for harmful tax increases.