Analysis: Budget will be tight again
FROM THE KANSAS STATEHOUSE
Legislature will be faced with controlling budget soon
By Carl Manning
The Associated Press
Published Monday, December 10, 2007
A month from now, give or take a day or two, the Legislature will be back in session and lawmakers again will hear about how they are spending too much money.
To drive home the idea that legislators need to impose a spending limit on themselves, the Americans for Prosperity-Kansas recently launched an ad campaign statewide on 24 radio stations and 140 newspapers. It also launched a Web site to track how the Legislature spends money.
"With a fiscal crisis looming over the next few years, it's very important to reach out to the public and inform them of the dire consequences of overspending," said Alan Cobb, state director of the fiscally conservative group.
AFP-Kansas says legislators should stick to a 3.5 percent increase in state spending, amounting to $213 million. It says that during the last session, the largest deficit spending in state history took place, when legislators planned to spend $526 million more than anticipated revenues.
Spending less has a nice ring to it. But the reality is that no matter how hard they try, legislators will end up spending more. The only question is how much more.
The state revenue forecast for the next budget year is $6.1 billion, compared to $5.7 billion for the current year. State revenue spending is expected to be $6.3 billion, up from the current $6.2 billion.
The forecast calls for state revenue spending to be $200 million more than what is received. The only thing saving the state from going into the red will be the more than $500 million carried over from the current budget year.
House Speaker Melvin Neufeld, known for squeezing the last ounce of fat from a budget, said the issue really is about controlling the budget.
"We're not going to cut it because we have built in from last year's legislation nearly a 4 percent increase, but we can't afford an 8 percent increase in the budget is the point," said Neufeld, a Republican from Ingalls.
As Neufeld sees it, the main thing is avoiding massive spending increases in any area.
"We've not proved that either the state or federal government has been efficient in reducing any programs. Government programs are like inertia, once it gets in motion it remains in motion," he said.
Overall, the state's financial condition looks fairly good. The latest estimates indicate state revenues for the budget to finance state government after July 1 will be $6.1 billion, or 7.9 percent above the current budget.
However, there is some economic uncertainty due to high energy prices and tight housing and credit markets, all of which could cut into the state's two main revenue sources, sales tax and personal income tax. If people are driving less, spending less and fewer people are working, the state has less to spend.
Even with revenue coming in as planned, the problem remains that most of it is spent before legislators ever see it because of demands mandated by federal or state law, court rulings or promises to the public.
Gov. Kathleen Sebelius, who is preparing her budget proposal to present to legislators in January, said it is unlikely legislators could meet the AFP-Kansas target.
"You would have to take health care and education and cut them, and I don't see any appetite for that," she said.
Senate President Steve Morris agreed, saying it would be "very difficult" to stay within the AFP-Kansas guidelines.
"With the requirements already there, it's going to take an additional 3.8 percent without us turning the tap on anything else," said Morris, Republican from Hugoton.
The 3.8 percent amounts to $234 million. To reach the 3.5 percent goal would require a spending cut of about $16 million.
"They're making the case of spending more money than we are taking in, which is true is some cases," Morris said. "It's items we have no control over."
For instance, education spending will increase by $179 million; spending for Medicaid and other health care services will go up by $43 million; and the state pension fund will need an additional $42 million. Altogether, about 75 percent of state revenues are for mandated spending, leaving legislators little wiggle room.
"To get any additional money for any project is problematic. Any new money is gobbled up," Morris said.
Since it is an election year for all 125 House members and 40 senators, the question of spending taxpayer dollars might be a little more real to lawmakers wanting another term in office.
"I think there will be clearly a lot of political pressure to keep spending down," Neufeld said.
Nevertheless, there will be some wanting to take care of the folks back home with some pet project.
"The amazing thing to me is there are people who want their $100,000 project funded and everybody else's cut and you always face that," Neufeld said.
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