Gov. sees Kansas moving closer to tax increase

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By JOHN HANNA

Associated Press Writer

TOPEKA, Kan. (AP) -- Kansas is "very close" to being forced to consider raising taxes to deal with budget problems, Gov. Mark Parkinson said Friday.

The Democratic governor's comments put him at odds with the Republican-controlled state Legislature's budget committee chairmen, who ruled out higher taxes.

The debate came the same day the Department of Revenue reported that tax collections in October were nearly $15 million below expectations, a shortfall of 3.6 percent. It was another sign that the state's financial problems are likely to linger.

Parkinson said he expects to make further spending cuts himself by the end of November to keep the budget balanced through June 2010, the end of the current fiscal year.

But he said the state must avoid "crippling" cuts in the following fiscal year -- which means legislators might have to consider raising taxes after reconvening in January.

"We're getting very close to that point," Parkinson said. "We need to provide sufficient funding so that -- although there will be pain during this time -- the basic structure of our system is maintained so that when revenues are replenished, we can go back to offering the services and the education that we did before."

The budget chairmen, Sen. Jay Emler of Lindsborg and Rep. Kevin Yoder of Overland Park, said the state should cut spending, eliminating relatively low-priority programs.

"We can't afford the same level of government that we could two years ago," Yoder said. "That's just the economic reality."

The state expected to receive almost $415 million in taxes in October and instead collected $400 million. Kansas already had a $67 million shortfall in tax revenues for July, August and September.

Parkinson and legislators have watched the month-to-month figures closely because officials plan to issue revised revenue projections next week, which are expected to be more pessimistic.

The forecasters also will issue the first projections for the state's 2011 fiscal year, which begins next July 1. Republican legislators expect to be reducing budgets again.

Kansas has already seen four rounds of spending cuts and other adjustments to keep the current budget in balance. Parkinson imposed the last revisions in July, a month after legislators adjourned for the year.

He said that if he makes further cuts this year, and then legislators contemplate cutting from 5 percent to 10 percent more in fiscal 2011, the reductions become crippling.

"Programs are eliminated and changes are made so severely that when the economy recovers, the agencies or the schools themselves don't recover," Parkinson said.

Echoing similar concerns was Ed Hammond, president of Fort Hays State University. He said the state needs to dramatically overhaul its tax system -- with revenue-raising measures, such as eliminating sales tax exemptions, balanced by business-friendly moves such as eliminating the corporate income tax.

He said deeper cuts will hurt higher education programs while pressuring universities to increase tuition. Even then, he said, they could be forced to reduce their enrollments to cope.

"I don't want Kansans to have to leave to get a quality education," Hammond said.

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On the Net:

Kansas governor: http://www.governor.ks.gov

Kansas Legislature: http://www.kslegislature.org

Fort Hays State University: http://www.fhsu.edu/