On a state of alert
September, Graves administration officials will know- State revenues have dipped sharply. If the trend continues, budgets will have to be cut. Period.
It's too soon to hit the panic button, but a $36 million cumulative shortfall in projected state revenues in April and May has Gov. Bill Graves' administration on a state of alert.
The end of the fiscal year this month, as well as the first few months of FY 2000, will tell officials for certain whether this is the start of a chronic problem or just an aberration. Cuts wouldn't be all that surprising. It's no secret the agricultural and oil segments of the Kansas economy have been in the doldrums. Meanwhile, income tax collections have dipped (by $40 million in May alone), perhaps as a result of large tax cuts from 1998. Meanwhile, many state departments were already preparing to operate on essentially flat budgets -- even before the shortfall of the past two months. The state Consensus Estimating Group that meets each November and April to predict revenues to the state can't be too harshly criticized for missing by $36 million -- since that represents a shortfall of less than 1 percent. It's pretty darn close. But that's still a lot of money. And as a practical matter, budgets may have to be trimmed if the trend holds. The state has been spoiled by better-than-expected revenues for several years now. Now it may be time to tighten the belt. Hard.
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