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Efforts by the federal government to boost a slowing national economy have created a big headache for Kansas officials in finishing work on the state's next budget.
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.
The forecasters say this year's federal economic stimulus package is a key factor in lowering the state's tax revenues because they are tied to the federal tax system. Lower federal interest rates are also expected to decrease the state's earnings.
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.
Sebelius expressed optimism that she and legislators wouldn't have to change course significantly on budget issues. Like other officials, she views the state's economy as stronger than the nation's.
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