No Bar Talk but Wait Until January

The Kansas Statehouse is going to shake Thursday afternoon, when a group of economic/tax/business experts deliver the Consensus Revenue Estimate (CRE) for the state for the upcoming fiscal year.

That obscure document will become the legislative basis for the budget for the remainder of this four-month-old fiscal year, and the number on which the upcoming legislative budget machinations will be based.

And…while the state is looking a little better in terms of revenues—that’s the taxes you have paid—there remains all that talk about a recession that would reduce state receipts.

While the CRE talks about the state of the Kansas economy and makes observations and predictions about the state’s health, the real key will be the prediction of the movement up or down and by how much of the State General Fund (SGF).

It is the SGF which is the fuel for almost everything Gov. Laura Kelly will propose in her upcoming—second—budget as governor, and almost everything the Legislature will do in this upcoming session, after which House and Senate members will stand for re-election.

Will there be enough revenue flowing into the SGF to make good on its spending approved last session for the remaining months of this fiscal year? Will there be enough revenue flowing into the SGF for meeting the state’s expenses, to pay the bills that it agreed to last year?

And…will there be enough money to expand programs that are beneficial to the state and its people, and which people?

Nope, the CRE isn’t likely to become the topic of discussion in many bars across the state, but it is going to be a major factor when the upcoming session convenes in January.

If revenues remain stable…well, that’s good news because it probably means that the state can meet its obligations—and remember, those obligations include a boost in spending on K-12 schools over the next four years which lawmakers approved last session and which the Kansas Supreme Court is going to enforce if necessary.

But for nearly everything else ranging from spending on highways to raises for state employees to ever-increasing spending on social service programs and just keeping the lights on, that CRE is the key to how Kansans live.

Will there be spare money for some sort of tax cuts that we all like? Enough that the revenue stream from, say, sales tax on food can be reduced through a tax reduction, and keep everything else running? Enough that the state can expand Medicaid to maybe 130,000 Kansans without health-care insurance, at an estimated cost of maybe $40 million?

Those are all the downstream calculations that are going to be made based on that CRE memo we’ll get later this week.

Putting together that CRE has been going on for several weeks. It’s this week that the Division of Budget, Legislative Research, the Department of Revenue and three economists from state universities will assemble their final best-guess of the money that is going to be available to finance state government for the rest of this fiscal year and next.

Remember, this is the election year legislative session, and while one can expect a little reach by lawmakers who want something catchy to campaign on, bullet points for their palm cards, such actions will cost the state money, or reduce income to the state.

And remember, also, that we are heading into an election year in which the governor’s name isn’t going to be on the ballot, and she’ll be looking into the future when she can stand for re-election and would like to have some nice moves to use in that 2022 election year.

Happy Thursday?