At the conclusion of the 2009 legislative session I wrote the following, "I was very disappointed with the omnibus budget that passed during the recent veto session. Leaving town with only $17,000 in the bank as a cash reserve was simply disgraceful; sadly this means that we have likely not seen the end of budget cutting even for FY 2010. Furthermore, we still face another $570 million in deficits when we return to Topeka next year. All of this is to say that the fiscal crisis that received so much attention during the legislative session was not resolved, and the tough choices we ducked this year will be staring us squarely in the face in 2010."
Unfortunately recent events have proven this statement true. As many of you know it was only a matter of weeks after my comments above that the Governor made a further 2% cut to most areas of state government. Now we have learned that September tax only revenue was short of projected estimates by $67.1 million. Most telling was that over $60 million of this shortfall was the result of lower than expected personal income tax receipts. These numbers say in black and white what we can all see with our own eyes; many Kansas families are continuing to experience the financial hardships associated with the economic downturn of the last year.
In a recent letter to House Republicans, Appropriations Chairman Kevin Yoder noted, "The impact of this shortfall should not be understated. The Governor has already had to make an approximate 2% cut across the board in many areas, by using his allotment authority in July, cutting about $90 Million. We will continue to watch the numbers in the fourth quarter, but we are now faced with the possibility of making rescissions again when we return in January, should revenue continue along this trend. The Governor had previously promised while stating his support of the bill passed in May that many in this caucus opposed, that if shortfalls occur, he would not hesitate to use his allotment authority to keep the budget afloat. This shortfall would be the equivalent of almost 1.5% in additional allotments. Please also don't forget that the Governor's previous allotment also included further raids on the highway fund, among other transfers that still require legislative action in January."
In the face of such significant budget shortfalls it is inevitable that some will argue for tax increases. I am convinced that increasing the tax burden on Kansas families and businesses is exactly the wrong approach. The simple reality is that while the overall economic downturn hastened the budget crisis in Kansas it did not create the crisis. Excessive spending is the real culprit. State General Fund spending increased 48 percent from 2004 to 2008, while population growth in Kansas during that same time averaged less than one-half of 1 percent per year. This unrestrained spending took us from a surplus of over $900 million in 2007 to our current situation. If we would have simply limited state spending over those years to the amount of revenue we took in we'd have a surplus of nearly $1 billion. Instead we spent the entire surplus we had, without setting money aside in a rainy day fund.
Resolving our states budges woes will not be easy, but honestly confronting the fact that state government spent beyond its means for far too many years is a necessary first step toward arriving at a long term solution.
