New fiscal forecast gives Kansas a little room on Medicaid, tax relief

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TOPEKA, Kan. (AP) — Kansas officials have issued a new fiscal forecast that is a little more optimistic about how much tax revenue the state should expect to collect over the next two years.

The slightly better projections released Thursday would give the state more budget room to expand Medicaid or provide modest income tax relief.

Democratic Gov. Laura Kelly urged the Republican-controlled Legislature to be cautious.

“Kansas has been on a rollercoaster for the last eight years and we must allow adequate time to recover and rebuild,” Kelly said. “It’s encouraging that revenue remains stable as a result of steady, responsible tax policy, but we must remain cautious.”

She wants to expand Medicaid, while income tax relief is a priority for top Republican lawmakers.

The forecasting group increased its projections for tax collections during the current budget year, which ends in June, by $45 million to almost $7.3 billion.

The group boosted its projection for the 2020 budget year that begins in July by $64 million to nearly $7.5 billion.

The forecasters issued their previous forecast in November.

In urging caution, the Kelly Administration pointed to nationwide trends including a recent survey by the National Association for Business Economists that warned the economy may slow in the coming year and could slip into recession in 2020.

“Kansans elected me to bring fiscally conservative and responsible principles back to our government,” Kelly said. “I take that responsibility very seriously.”

The Governor's Office also cited an adjustment by the Federal Reserve which lowered its predicted economic growth from 2.3% to 2.1%.