We all are waiting on the Consensus Revenue Estimating Group (CREG) revised forecast of the amount of revenue the state can expect to finish out this fiscal year. The year started, essentially on April 16, 2008, when the CREG made the first bad-news announcement when it predicted a $150 million drop from their November 07 estimate.
The April estimate set the clock for the fiscal year and we were all told that the news would be bad and the expected revenues would fall far short of needs. By Nov 2008 CREG predicted another $211.4 million in decreased revenues for the current FY 09. This was not a great surprise as the nations economy was taking a nosedive. Then the news became worse as the monthly revenues continued to come in below estimates.
The short story is that the FY 09 rescission budget adjustments may not have been enough as the revenue continues to decline, $138 million in slippage for the FY 09 so far. The total is roughly $500 million less revenue than anyone expected when the current budget was signed into law.
The rescission bill, remember it? It cut spending and took on some federal stimulus (rescue) funds, and for ’09, on the day it was passed and sent to the governor, was believed to hold $167.5 million in reserve. But, that balance has been cut by March’s revenue shortfall to now about $110 million.
You can do the math. Two more “March” shortfalls, and Kansas is in the red. That means we could have to do more cutting in the current FY09 budget. This fiscal year will not be over until June 30th and the cookie jar is close to being empty. The state constitution requires us to have a 7.5% ending balance, somewhere around $750 million, I predict we will not even be close.
What does that mean? In my little business world if you cannot increase revenue (income) you have got to cut expenses. Where do we continue to cut and still maintain critical public services? Are you all up for a tax increase? I would like to know. I am not kidding drop me a note or letter.
Speaking of tax increase, I assume you all have received your property tax notices. Certainly some appraisals have gone up while many may stay the same or have declined. Statewide the decline in residential values is roughly 2%. What happens when your values go down? Well, you would think your taxes should go down too.
In response to many inquiries that the state requires an increase in your property tax annually, this is not correct. State law requires reappraisal annually to keep property values equal across the taxing district. The reappraisal can just as easily reduce your value, but many report to me it seldom does. The report sent out last Nov 08 shows the county would receive about $2,349,442.76 more money (11.9%) than they did in the prior year. The county receives this money with only a 1-mill increase.
It is true the State of Kansas by passing the new material and equipment tax abatement may cause some shortfall in county tax receipts. The state was trying to spur some economic development and since the tax would not have been there anyway, what difference would you expect? There would only be an increase in other taxes caused by this growth.
The reality is that there is no easy answer, the state needs to slow down government growth, people need to become less dependent on government assistance, and we all need to live without a few things for a while until this mess straightens out.
I am working with the city and KDOT to come up with a barrier solution for the culvert on North Main, where Bayleigh Stovall a 15-year-old young girl was drowned when her car became trapped during a sudden rainstorm in mid March. I have been in contact with Deb Miller the Secretary of Transportation and El Dorado City officials to work out a solution that will address this safety issue. I am confident we will be able to quickly come to a reasonable solution.
I consider it an honor and privilege to represent you in Topeka and I do want to know what you think. If you have need of personal assistance please contact me. My e-mail is johng@carlisleinc.net, or john.grange@house.ks.gov, my website is www.johngrange.net, my home phone is 316-321-2087, or mail at 1115 Rim Rock Road, El Dorado. 67042. Thanks, John
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