This past Tuesday was a busy day in Topeka as the entire House Appropriations Committee and the four subcommittees were called in to work on the revisions of the FY 2010 State Budget. We began the morning with staff briefings on the Consensus Revenue Estimating Group, estimates on the expected revenue.
As you already know the state is expecting below normal (and then some) cash income for the next year or so. I do not want to wish my life away but FY 09 can’t end quickly enough for some. We wish to have around $700 million cash at the end of the year, which is June 30th. Our best estimates currently are projecting $29 million.
Past programs and newly organized programs all are going to take a hit this go round. Efforts to “hold-harmless” schools, SRS, and other high profile programs have not succeeded. Our guidance going into our sub-committee meetings was to take another 5% across the board from the entire state budget. This would produce around $427 million with $100 million surplus.
There are still a bunch of things to consider when you reduce budgets. We may be stopping or slowing down very worthwhile programs, we may lose some federal matching funds, and of course we all have community programs, local governments and schools boards to work with. The governor has proposed to borrow another $38 million in bonds for the continued renovation of the Kansas Statehouse.
We met with our assigned agencies to hear their plans for additional cuts. I will admit I am impressed with the forward thinking of the agencies and their willingness to leave the “woe is me” attitude at the door. Better days are certainly ahead for us and I hope we never forget this exercise. Some of the old timers in the legislature say this is the 4th time they remember a crisis of this kind. The last being after the 911 attacks on the World Trade center.
Estimates of Kansas Growth State Product used in November of 3.5% for 2009 and 5.0% for 2010 have now been reduced to a negative –1.5% and –2.9%, respectively. While there seems to be a general consensus among analysts that the aggressive use of new fiscal and monetary policy initiatives by the federal government may help prevent a much more serious economic collapse, the length and severity of the current down-turn remain to be determined.
Many forecasts continue to indicate that this could be the longest and deepest recession in the last 70 years. Did you get that? Not since WW 2, has the economy looked so bleak. The Consensus estimates are based on a number of assumptions regarding historically weak economic indicators throughout 2009; and the return of only a very modest growth in 2010.
Kansas Personal Income (KPI) in 2008 grew by 4.9 percent over the 2007 level. KPI is currently expected to decline by 0.5 percent this year, which would represent what is believed to be the first annual reduction since World War ll.
Data obtained from the Kansas Department of Labor indicate that the employment picture for Kansas has continued to deteriorate over the last winter. Most recent data show that total Kansas’s non-farm employment from Feb. 08 to Feb. 09 had contracted by 1.6 percent. Most major sectors experienced significant employment decreases, especially manufacturing, professional and business services, and construction.
Current estimates by the Department are that overall Kansas unemployment rate, which was 4.4 percent in CY 2008, is expected to jump to 6.0 percent in CY 2009 before moving to 6.3 percent in CY 2010. These newly revised estimates suggest a much longer timeline of relatively serious unemployment issues for the state than did the estimates of 4.7 percent for both calendar years used in November.
The good news is that many states are far worse off than we are. We have excellent people; elected, businessmen, civilians and state employees working together to plow our way through this morass and we will come out of this “crisis”, I hope we all remember the lessons learned.
We return to Topeka for the final Veto Session of 2009 next week and our 90th and last day of the session is May 9th. We will be spending most of our time on the house floor or in subcommittees. If you have any suggestions, questions or comments you may have an easier time contacting me at my house e-mail, john.grange@house.ks.gov, or by calling 1-785-296-7655.
I am currently working on many constitutent issues with a variety of agencies. I will continue to pursue these agencies to resolve your issues. I believe that I am here to serve you and act as your voice to the agencies and have been pretty successful in helping finding answers and solutions on your behalf.
I consider it an honor and privilege to serve you in Topeka, if I can be of assistance just get in contact with me. My home is 1115 Rim Rock Road, El Dorado 67042, 316-321-2087, email at johng@carlisleinc.net, past updates can be found at www.johngrange.net.
May God bless you and our Great State of Kansas. Thanks, John.
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