KANSAS CITY, Kan. — Kansas is facing a $653 million budget shortfall by June 2021 due to lower tax revenues, according to projections.
Gov. Laura Kelly said it's an unprecedented gap, and lawmakers agree for the need to be creative with the budget to get the state fiscally back on track.
Kansas expects to lose nearly $1.3 billion in tax revenues during the remaining fiscal year and next year, according to a recent letter from the Kansas Legislative Research Department.
"It goes without saying that incredibly difficult budget decisions loom in the weeks and months ahead," Kelly said Tuesday during her daily conference. COVID-19 briefing.
Kansas expected to collect $7.7 billion in tax revenues this fiscal year that ends June 30, but now it won't even hit $6.9 billion.
This is due to the economic downturn brought on by the pandemic, which has forced businesses to close and swelled unemployment roles.
Lawmakers said that smart budgeting during the last few years has provided the state extra leeway despite the shortfall.
"We were smart enough that, when our revenues were coming in way above projections, that instead of cutting taxes we kept that for a rainy day, and, boy, is that rainy day here," Kansas Rep. Stephanie Clayton, a Johnson County Democrat, said.
The state's finances will be in good shape this year, but lawmakers are worried about fiscal year 2021.
"My concern, when we take a look at cuts, is making sure we’re not cutting off the future," Kansas Rep. Jan Kessinger, a Johnson County Republican, said. "I have found this crisis is forcing us to be more creative in how we do business and how we run the state."
Lawmakers don't want to make cuts to education, highways or public safety.
"I also think, if we get on top of things with tracking and personal protective equipment, that we can have kind of a safe revival of our economy," Clayton said.
Kessinger said he won't support raising taxes.
"We need to be able to do things that will create more money," he said, pointing to areas for potential revenue growth, like sports betting.
Clayton said she hopes they don't have to cut anything and would support Medicaid expansion as well as the legalization of medical marijuana.
Kelly told state agencies to hold off on non-essential hires and look at ways to cut costs, while a comprehensive plan is formulated.