The Kansas Association of Counties reported last week that the Consensus Revenue Estimating Group—a committee of fiscal experts given the responsibility to predict the state’s budgetary future—has estimated a loss of $705 million in fiscal year 2014 (which starts July 1, 2013) thanks in part to the governor’s new tax policies. Because the state is expected to have a $473 million surplus, the governor and state legislators would need to make additional cuts of some $328 million to balance the budget.
This is discouraging news for state-funded programs that already have been forced to bite the bullet in recent years because of the nation’s general economic downturn. This latest revenue shortfall appears to be of political origin: the governor’s tax new policies. We were warned when they were passed that the new policies, designed to enhance the state’s business climate and attract more companies and jobs to the state, may take time to prove their worth.
Well, the initial dip in revenue appears to be correctly predicted. Whether economic growth will follow remains to be seen. Hopefully very soon. —DR