New Kansas governor greeted with positive fiscal forecast

November 10, 2018
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FILE - In this Nov. 6, 2018, file photo, Democrat Laura Kelly waved to the crowd at the Ramada Hotel and Convention Center in Topeka after she won election, to become the next Kansas governor. Democrats who gained new or expanded powers in state elections are gearing up for a left-leaning push on gun control, universal health care and legal marijuana. Meanwhile, some Republican legislatures that have cut taxes and limited union powers are adjusting to a new reality of needing to work with a Democratic governor. The midterm elections Tuesday, Nov. 6, increased Democratic relevance in state capitols that have been dominated by Republicans during the past decade. (Thad Allton/The Topeka Capital-Journal via AP, File)

TOPEKA, Kan. (AP) — Democratic Gov.-elect Laura Kelly learned Friday that she stands a better chance of fulfilling a campaign promise to boost spending on Kansas’ public schools without raising taxes with a new, more optimistic fiscal forecast showing it’s possible in the short-term.

The state’s official revenue-estimating group increased by $291 million the projection for tax collections expected during the current fiscal year, which began in July. That’s 4.2 percent higher than the previous fiscal forecast made in April and brings the prediction for tax collections to $7.2 billion.

The forecasters also predicted tax collections will grow by 2.7 percent during the fiscal year that begins in July 2019, to $7.4 billion. The picture isn’t completely rosy: The forecast assumes economic growth flags in 2021 and tax collections grow then by 1.6 percent, to roughly $7.5 billion.

But the Legislature’s nonpartisan research staff released a budget profile showing Kansas can increase its annual spending on schools in each of the next two fiscal years after covering anticipated higher social services costs.

Kelly said during her campaign that she wanted to increase public school funding, and the Kansas Department of Education estimates another $90 million a year is necessary to comply with state Supreme Court mandates in an ongoing education funding lawsuit. Kelly also wants to expand the state’s Medicaid health coverage as encouraged by the 2010 federal Affordable Care Act.

“This is good news for our families and the state of Kansas,” Kelly said in a statement. “I will continue to work with leaders of both parties to keep our state on the road to recovery so we can invest in our schools, expand Medicaid and balance the budget without new taxes.”

Kansas experienced persistent budget shortfalls after an experiment in cutting state income taxes in 2012-13 engineered by then-GOP Gov. Sam Brownback. Kansas became a national example of how not to do trickle-down economics, and bipartisan legislative majorities reversed most of Brownback’s tax cuts in 2017. Tax collections have exceeded expectations ever since.

In the governor’s race, Republican nominee Kris Kobach promised to slash taxes and shrink government spending at the same time to keep the budget balanced.

Departing Republican Gov. Jeff Colyer — who narrowly lost to Kobach in the August primary — said of the new forecast: “This also puts us in a better position to give back to Kansans by lowering taxes, funding education, and making other critical investments in our state.”

Kelly said during a news conference Thursday that increasing school funding is her top priority, but during her campaign, she had a list of other neglected areas of the budget, including higher education, social services and mental health services.

Top GOP lawmakers, frustrated by what they see as unrealistic promises, said the Republican-controlled Legislature will hold her to her promise not to raise taxes.

But Kelly may have some leeway with voters to raise new revenues.

A majority of Kansas voters were at least somewhat supportive of increasing taxes to provide additional funds for public schools, according to AP VoteCast, a nationwide survey of about 139,000 voters and nonvoters. The survey, conducted for The Associated Press by NORC at the University of Chicago, included 3,963 voters and 780 nonvoters in Kansas.

Fifty-eight percent of voters said they strongly supported or somewhat supported raising taxes to boost education funding, and a majority of them backed Kelly. Forty-one percent strongly or somewhat opposed a tax increase, and roughly two-thirds of them backed Kobach.

“That surprises me, but I don’t think a tax increase to fund schools is going to be necessary,” said Senate Minority Leader Anthony Hensley, a Topeka Democrat, adding that with the new forecast, Kelly has “a lot of flexibility.”

State officials had expected a more optimistic forecast because the state’s tax collections have exceeded expectations for 17 consecutive months, the longest streak since at least February 1966, according to data compiled by The Associated Press. The forecasting group is made up of legislative researchers, Department of Revenue officials and state university economists.


Also contributing was Amanda Seitz in Chicago.


Follow John Hanna on Twitter: https://twitter.com/apjdhanna .

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