A $13 billion-plus state budget is likely to win approval from legislators this week, but it's built on what seems a convenient fiction.

A $13 billion-plus state budget is likely to win approval from legislators this week, but it's built on what seems a convenient fiction.


The apparent fiction is the notion that state revenues won't fall short of expectations again for the rest of the current fiscal year or the state's 2010 fiscal year, which begins July 1. Few, if any, legislators expect the state to have such good luck in the current economic climate.


If tax collections continue to fall as short of expectations as they did through February, the budget about to win approval fiscal 2010 won't balance, and legislators will be forced to revise it. If the state's finances get significantly worse, legislators might even have to revise the current budget, too.


But legislative leaders are stuck with a 4-month-old financial forecast in a climate in which their colleagues appear averse to painful decisions.


The next forecast won't be issued until April 17, two weeks into legislators' annual spring break. Legislators are scheduled to reconvene April 29 to wrap up their business for the year, which is likely to include further budget revisions.


"I think it's anybody's guess at this stage of the game," said Senate Minority Leader Anthony Hensley, a Topeka Democrat. "Everything is contingent on the revenue side."


The House and Senate expect to vote this week on a 2010 budget drafted by negotiators who reconciled dozens of differences between their chambers on spending issues. The product uses $585 million in federal stimulus funds to prop up the state's finances, as Gov. Kathleen Sebelius had proposed.


The results are mixed, depending on the agency. Legislators are making significant cuts in public safety, agriculture and natural resources and general government agencies. Some social services are protected.


The state would cut base aid to its 295 school districts and their special education funding by about $25 million, or only 0.7 percent of their total budget.


Higher education comes out looking like the biggest winner. Having taken a round of cuts in the first budget, universities, community colleges and technical colleges don't appear to take another — except that the stimulus funds used to achieve the result come with strings that probably mean further belt-tightening for some programs.


The Republican-controlled Legislature had been headed toward a confrontation with the Democratic governor over the budget. GOP leaders had talked about cutting the spending financed with general tax revenues by an average of 10 percent.


"It may not be what I exactly proposed, but it's certainly better than a number of the proposals that had come out of earlier legislative discussions," Sebelius said of the resulting budget during her most recent news conference.


Republican leaders had worried repeatedly about using stimulus funds to finance ongoing programs. The dollars will be available during the state's 2010 and 2011 fiscal years, but there's no promise they will continue afterward. That means, as several GOP legislators noted throughout budget debates, that the state may simply be postponing difficult decisions rather than solving its budget problems.


"That guarantees that we'll be having these same sorts of discussions for several years to come," said Senate Majority Leader Derek Schmidt, an Independence Republican. "What was missed was an opportunity to get the pain behind us, rather than have it linger."


On paper, the budget works without larger cuts in higher education or aid to public schools — or any of the tax proposals or the use of licensing fees for unbuilt, state-owned casinos that Sebelius proposed but GOP legislators dislike. There also appears to be no need for a contentious debate over whether the state should "decouple" its tax code from the federal code to boost revenues.


According to legislative researchers, the state should end its 2010 fiscal year with cash reserves of $141 million. Guidelines in state law call for reserves three times as large, but the smaller amount is of course far better than the $682 million deficit researchers had projected.


But those projections aren't solid. They do account for the $82 million shortfall in projected revenues from July 1, 2008, when the current fiscal year began, through Feb. 28, 2009. But they don't anticipate any further drop.


Some of those researchers and legislators think it's reasonable to expect revenues to continue to fall short of expectations by about $20 million each month for March, April, May and June.


If they do, the budget about to win legislative approval for fiscal 2010 goes into the red. That's because revenue lost in the current fiscal year also automatically lowers projected revenues for fiscal 2010.


The problem will get worse if the officials and university economists who issue the state's financial forecast are persuaded by economic data that tax collections in fiscal 2010 will be lower than in fiscal 2009. Budget projections assume flat tax collections in fiscal 2010.


"I think there's a lot of unknowns out there," said Senate President Steve Morris, a Hugoton Republican. "We have to be flexible."