Better Than a Prom Date?

Well, we gotta wonder, besides getting that prom date you hoped for, what is better than having $510 million more to spend in the upcoming legislative session than you thought you’d have when you left Topeka last summer?

Hmmm…not sure…

The Consensus Revenue Estimating Group, as we predicted last week, boosted the state revenue estimate. And now that the state’s budget experts and three university economists have released their estimate—it is $510 million in increased tax revenues for the remainder of this fiscal year and next—we’ll see how good this gets.

Already, we know that about $65 million of that new, or, rather, predicted new money is already spent even before the Legislature convenes. That’s the estimate of how much more the state is going to have to spend this year and next on social services for the state’s poor to provide the services that they get now. That estimate just came in a day before the revenue estimate. Think welfare, foster care, and health care for the state’s poor. Not flashy, not anything that’s going to be a big campaign issue, but a necessary state expenditure from that $510 million.

So, we’re at about $445 million in new spendable cash for the governor and legislators to scrap over.

The unsexy way to use that money? Rebuild the staffing shortages in state agencies that provide Kansans services. Pump more into K-12 education and produce a more valuable workforce for the state. Keep some balance in the State General Fund in case something unexpected happens.

But will that happen? That’s where the fight starts.

Remember, last year Democrat Gov. Laura Kelly vetoed a massive tax-cut bill the Legislature sent her that would have fit into that $445 million with a little room to stretch. Remember? Of course, we didn’t know how much money would be available when she vetoed the bill. Republican legislative leaders essentially said don’t worry, it’ll work out. Well, it did, but we just didn’t know that last year.

So, this upcoming session?

There are several balls in the air.  Kelly wants stable finances while she’s in the driver’s seat. Who wants to be captain of a sinking ship—especially because in just three years, she may want to be re-elected?

For the Legislature? That’s where it gets interesting.

Republicans in both chambers basically want sizable tax cuts to help them get re-elected and have lobbyists buy them drinks and meals for the next two years (House) and four years (Senate). They’ll leave it to Kelly to figure out how to keep the state running in the years leading to her re-election.

Besides the tax cuts/fiscal stabilization scrap, it’s also a chance to load up a tax-cut bill that Kelly might feel she has to veto. Who, even Democrats, wants to vote to sustain a veto of a tax-cut bill in an election year?

Oh, and that GOP tax-cut bill can be made very attractive to Democrats. Think a two percent cut in the sales tax on food. Biggest cut ever considered on a Democrat- and maybe even some Republican-hated tax that the state can, with its new revenue estimate, probably afford.

See the squeeze here?  It’s Republicans finding a lever that puts an election-year veto-proof vest on big tax cuts. It might force Democrats to hold their noses and vote for de-coupling of state income tax deductions from the federal standard deduction, worth about $60 million to the more prosperous and likely Republican Kansas income tax filers.

The Consensus Revenue Estimate has handed Republicans a political baseball bat. Had the estimate shown no increase in revenues, or just a small increase, the upcoming legislative session would be dull.

It’s starting to sound like a prom date now, isn’t it…?