Kansas Gov. Mark Parkinson announced $259 million worth of spending cuts, reducing funds for highway maintenance and education to shore up a troubled state budget.
The cuts are the fifth such reduction for the state budget year, which ends June 30. Parkinson said Kansas was in historic times, never before seeing two consecutive years of revenue declines, let alone the four-year trough it faces now.
"This has been particularly challenging for the 2010 budget, which has been absolutely decimated by this decline in state revenue," Parkinson said Monday. "There are no longer any easy answers."
The Democrat's plan also calls for drawing down an additional $85.9 million in federal stimulus dollars given to states to prop up budgets. That leaves $189.6 million remaining from Kansas's allocation.
Republicans said Parkinson was helpful in making the cuts, but thought he could have gone deeper in cutting spending without borrowing from transportation funds or federal funds that will be needed next year.
"I applaud the governor's effort to make what are some very difficult decisions," said Rep. Kevin Yoder, chairman of the House budget committee. "What we didn't see and hoped to see were real, significant reductions in government spending."
Legislative budget analysts said Monday that even with the governor's cuts, Kansas already is looking at a 2011 budget hole of as much as $400 million.
Parkinson made the cuts in response to a Nov. 5 revenue estimate that foretold a gap of $260 million between state revenues and approved expenditures. Parkinson said he could not promise there wouldn't be further cuts next spring when the next revenue forecast is given.
Policy-makers use the revenue forecast as the basis for setting the state budget. Estimates are made twice a year, taking into account trends in the economy.
Parkinson said every agency took a hit and will have to adjust accordingly.
"I am genuinely sorry," he said. "There is no way to sugar coat this. This will have negative affects across the state."
The governor promised legislative leaders earlier in the year that he would balance the budget through cuts before the 2010 session begins in January. He said Monday that work on the 2011 budget year begins immediately, but wouldn't commit to pushing to raise taxes to cover future revenue shortfalls.
Legislative action will be required to make permanent Parkinson's cuts, which include a $50 million reduction to the Kansas Department of Transportation for maintenance, $36 million for K-12 schools and $2 million for higher education. Medicaid reimbursements paid to providers, such as doctors, nursing homes and services for the disabled, were reduced 10 percent, or $22 million.
Parkinson said state agencies would have flexibility in responding to the cuts, which may include layoffs or furloughing employees.
Yoder, an Overland Park Republican, said cutting wage costs was the way the state could reduce spending, much like the private sector has been forced to do when the economy slumped.
House Minority Leader Paul Davis, a Lawrence Democrat, said state budget cuts could have been avoided over the past decade if not for tax cuts enacted by Republicans while spending increased.
"This goes far beyond 'trimming the fat' from state agencies," Davis said. "These cuts are now doing severe harm to our public schools, community colleges and universities and the most vulnerable Kansans who are relying on state services to survive this economic downturn."
Derrick Sontag, state director of Americans for Prosperity, which favors smaller government and opposes tax increases, said Parkinson should continue to look for ways to cut inefficiencies and for long-term solutions to end the budget crisis.
Parkinson cautioned school districts not to consider suing the state for additional funding, as they did in 1999. That suit resulted in a 2005 Kansas Supreme Court ruling and a spending increase of nearly $1 billion over the past four years.
The governor said districts should wait to see what state revenues do once the economy rebounds. If education cuts are not restored, then a lawsuit may be necessary, Parkinson said.