Wednesday, December 17, 2014

HAWVER: Numbers equal unpleasant days ahead

By MARTIN HAWVER, At the Rail | 8/11/2014

You have until probably Nov. 2 to like your legislator and your governor.

After that, it gets a little shaky.

You have until probably Nov. 2 to like your legislator and your governor.

After that, it gets a little shaky.

Because on Sunday, Nov. 2 — or, rather make that Monday, Nov. 3, the day before the general election — the Consensus Revenue Estimating Group will announce the state’s official revenue estimate for the rest of this fiscal year and make its projection for the next fiscal year.

The group’s projection undoubtedly is going to be that Kansas has barely enough money to make it through the end of the fiscal year on June 30, 2015.

So, if you are one of those Kansans who doesn’t pay state income tax — say you own a company and have adjusted its business paperwork so the money it makes is “pass-through” money that isn’t taxed — or maybe you are a wage earner and paid a little less income tax this year because of those tax cuts ... enjoy it.

While some news media are looking into the future with official projections of a state budget deficit a year away, most who live paycheck to paycheck are going to see changes in their lifestyle shortly after the new legislature is sworn-in in January.

Because the immediate problem is taking what is now predicated to be a slim $29.4 million ending balance for the fiscal year we’re living in now and actually getting through the fiscal year with that small cash balance.

The $29.4 million figure is what’s predicted now by legislative staffers, but the November Consensus Revenue Estimating Group figure is likely to be less, which means those newly elected legislators are going to have to be voting on some pretty ugly legislation while they’re getting used to their new jobs and figuring out just what they are supposed to be doing in Topeka for the winter.

Because the state constitution prevents a below-zero budget balance, lawmakers are likely to have to quickly either raise money or cut spending — likely in the current fiscal year. Which means the governor is going to have to come up with spending cuts in an already anorexic state budget or raise money, and that money is likely going to come from you.

Now, this whole vote-for-me, give-me-your-money deal might not be necessary if Gov. Brownback’s experiment with economics works: If every Kansan who saved money from the tax cuts spend that saved money on stuff that the state taxes. They haven’t done it yet ... in fact, sales tax revenues have so far been below expectations. Maybe people will loosen up this fall, buy more merchandise, maybe drink more liquor and possibly start smoking, because the state tax on cigarettes is relatively high, so it’s (initially) a money-maker for Kansas.

But this is going to be interesting, this budget mess. Cutting spending is always tough, except for the occasional robbing of the highway fund, which already contractors are girding to defend from such tactics. Cutting money for K-12 education is going to be difficult, because the Kansas Supreme Court is already considering whether the state is spending enough money to provide children a suitable education.

So, what’s left? Squeezing a few bucks out of other agencies, or maybe thinking up a tax on something that a relatively small percentage of Kansans will feel? Put a small sales tax on services? Watch the lawyers and the accountants march on the Statehouse in crisply starched shirts that they send out to be laundered.

This might just be the politically best couple months that all those folks running for the Legislature and the governor’s office have before the hard numbers are produced that mean they have to do unpleasant things.

So, if you are running for office, or voting for people who are running for office, this is the couple months that will seem like that first date that went just right ... until it’s time to drop you off at the door.

Martin Hawver is publisher of Hawver’s Capitol Report. Visit his website at www.hawvernews.com

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