All eyes on new state revenue estimates on Monday

Education advocates on Monday will be watching closely as the Consensus Revenue Estimating Group puts together fiscal estimates that the state, including public education, will depend on. 

The revenue forecasting comes during extreme uncertainty caused by the continuing coronavirus pandemic, which has shut schools and much of the U.S. and Kansas economy. 

In a memo to legislators earlier this month, the Kansas Legislative Research Department said the revisions will be impacted by the unprecedented increase in unemployment, the delays of federal and state tax filing and payment deadlines to July 15 and the enactment of federal legislation. 

With approximately half of the state budget dedicated to K-12 schools, state revenues are crucial to funding. 

Just five months ago, the Consensus Revenue Estimating Group — budget experts from various state agencies and university economists — predicted modest economic growth, strong employment, growing wages and a relatively tight labor market. There were no concerns then about a pandemic spread. 

Kansas revenues have been on the rebound since the repeal of former Gov. Sam Brownback’s tax cuts. In 2018 and 2019, state general fund revenue has grown at 13 percent and 12 percent. And for the current fiscal year, revenue is running $165.6 million, or 3.2 percent ahead of projections, and $340.3 million, or 6.9 percent ahead of the last fiscal year. 

That rebound has enabled legislators to fund the phased-in K-12 increases to address the Gannon lawsuit, in addition to making other state budget investments and building sizable ending balances — $927 million at the end of this fiscal year and $731 million next year. 

But state officials expect a drop-off in revenue because of the coronavirus crisis. Earlier this month, Gov. Laura Kelly said, “we know we are going to take a huge hit in our revenues.” Extension of the tax filing deadline to July alone “will be a huge hit on our bottom line,” she said. 

Some of that “hit” may be offset by stimulus funding from the federal government and when hundreds of thousands of Kansans can return to work. Kelly says she and governors across the country are discussing strategies on re-opening their state economies, but she said while there is pressure to do so, her decision will be based on science not politics. 

KASB, on Monday, will be following developments of the Consensus Revenue Estimating Group and will report on its projections as soon as they are available. 

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