Forecast Casts Cloud over Budget Process

TOPEKA, Kan. (AP) _ The state's new financial forecast is more pessimistic, and it's thrown the budget debate into turmoil.

Forecasters said Wednesday that the state would have $130 million less than previously anticipated for the next state budget. That's about 2 percent less than under the old forecast.

It wasn't immediately clear how Gov. Kathleen Sebelius and legislators would respond to the bad news. They could stay the course and adopt a budget providing a modest increase in spending for state government for the fiscal year beginning July 1. But that would significantly deplete the state's treasury reserves.

House Speaker Melvin Neufeld, R-Ingalls, reacted to the forecast by restating a committment with Senate President Steve Morris, R-Hugoton, to hold state spending increases to no more than 5-percent.

"It is obvious we have more difficult spending decisions to make as we finalize the Omnibus budget in the coming weeks," Neufeld said in a statement. "Each aspect of our budget will needs to be scrutinized to
ensure accountability and responsible spending. With the downturn in the economy, Kansans are making the same difficult spending decisions in their own lives and House Republicans will remain committed to holding the line on new spending.”

The forecasters say this year's federal economic stimulus package is a key factor in lowering the state's tax revenues.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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