On Friday afternoon, just three days after Kansas voters have decided just whose name will go on the checks that will provide the $99,636 salary we pay our governor, a small panel of economists and tax experts will deliver the second-biggest news of the week in Kansas.
(Note: This column was written before the election.)
It’s the obscure Consensus Revenue Estimate (CRE) panel, and it will deliver the real news which is the experts’ best estimate of just how much money that governor is going to have to spend in his/her first year at the top of the governmental food chain.
Now, there isn’t going to be a reception with drinks and finger-foods as the results are announced, but just how much money the governor will have to provide Kansans the services that they campaigned on is a big deal.
That CRE will become the baseline for the new governor’s budget and is the key to not only fulfilling campaign promises, but to providing basic services to thousands of Kansans who receive state-financed social services and health care from the state, plus things like highway work, aid to public education, public safety, the judiciary and everything else.
It’s a big deal.
In last year’s estimate, the group of scholars predicted that the state would take in $6.8 billion for the current fiscal year, which ends on June 30, 2019. That was a $108 million boost over the previous year. And in April, the CRE was adjusted, and this year’s revenues were estimated at $7 billion, a boost of $217 million for the current budget year, for which spending was approved last spring.
Not a bad boost in revenue, was it?
Well, Friday we find out whether there is more money that the Legislature can spend—or return to Kansans in the form of tax cuts for the current fiscal year, and the amount that the governor/Legislature will have to spend or not spend or return to Kansans through tax rate reductions in the fiscal year that starts next July 1.
Yes, that’s the real result of that CRE estimate Friday. Spend more money or cut taxes. Republican Kris Kobach talks about income tax cuts, Democrat Laura Kelly talks food sales tax cuts, after meeting Kansas Supreme Court orders for more spending on K-12 education.
Best estimates are that the Kansas economy is relatively strong now, lots of people working, and jobs out there for the unemployed if they care or have the skills to land those jobs. Count on the CRE showing some more revenue to spend or save or return.
The income and sales tax increases of the past couple years are now solidly in effect. We’ve seen what they produce in revenue, and this CRE ought to be a pretty good measure of just how strong the Kansas economy is. The income tax boost of a couple years ago? Well, the administration never really knows how much those tax hikes raise until people have been paying them for at least a year, and that year is over.
So, what happens after Friday?
It’ll be mostly under-the-covers planning for adjustments of current year spending, most of which has already been approved by the Legislature, with some touch-ups for unanticipated spending needs.
But the real news will be that the CRE is a new governor’s blank check for her/his first budget, and a definition of just what the new governor believes is important, either for the state or for the governor’s future…
New governor? That’s big news. And how that new governor plans to spend our tax dollars? That’s big news, too.
Martin Hawver is publisher of Hawver’s Capitol Report