COVID-19 impact rocks state budget

Gov. Laura Kelly predicted the Kansas budget would take a big hit because of the coronavirus pandemic that has essentially shut down major parts of the economy. She was right.  

State budget experts Monday met and announced new financial data for Kansas. 

The numbers are bleak. The Consensus Revenue Estimating Group decreased expected revenue for the current fiscal year by $827 million, or 10.8 percent. For the next fiscal year, which starts July 1, the group decreased an earlier estimate by $445 million, or 5.8 percent. 

That’s a total decrease of $1.272 billion from an earlier estimate in November.  

“This result is heavily influenced by the economic effects of the novel coronavirus outbreak, which had not been part of the November forecast,” according to a memo from the Kansas Legislative Research Department. Here is a link to the memo.  

Because of hefty ending balances over the past couple of years, state government will end this fiscal year in the black, but that could change quickly. A budget profile shows that combined with already approved increases, including an increase for public schools to address the Gannon lawsuit, the state faces a negative ending balance of more than $650 million in fiscal year 2021. 

At her daily news conference on the coronavirus pandemic, Kelly addressed the budget issues before the revenue group had announced its findings. 

Kelly said she had directed state agencies to start tightening their belts by not hiring anyone unrelated to addressing the pandemic, issuing no new pay raises and cutting off all discretionary spending. 

“Although we hope for the best, we are preparing for the worst,” Kelly said.  

Monday’s decreased revenue estimate was reminiscent of the huge declines during the Great Recession and the years following Gov. Sam Brownback’s tax cuts. Those declines resulted in cuts in many areas of state government, including public schools. 

Since K-12 funding makes up half of the state budget, education leaders should stay abreast of the state’s developing revenue situation. 

Legislators are scheduled to return to Topeka on Monday for the wrap up session, but that may be delayed because of the pandemic. Both the House and Senate budget-writing committees have scheduled meetings for Thursday and Friday. 

KASB will have more details on the new revenue numbers and their implications tomorrow.  

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