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Kansas treasurer mindful of state balances

John Milburn, Associated Press

TOPEKA, Kan. (AP) -- Kansas Treasurer Ron Estes urged legislators Wednesday to be mindful of maintaining healthy cash balances as they draft the state's budget for the coming fiscal year.

The Wichita Republican said he supported efforts to create policies that would encourage economic growth but that those efforts must be balanced with keeping the state's ability to pay bills.

"Maintaining a healthy cash balance within the state general fund is a key element to the continued operations of our state government and providing Kansans with state services," Estes said.

The Senate was scheduled to debate a bill Wednesday that would cuts income taxes, reducing state general fund balances in the coming years. Critics of the cuts have raised concerns that the revenue reductions would hamper the state's ability to pay its bills on time and adequately fund programs.

The state has been able to maintain healthy cash balances, in part by borrowing from state idle funds, which are collected by state agencies and other sources but aren't spent immediately. The state repays those funds at the end of each fiscal year so the agencies can use the money for their intended purposes. Kansas borrowed $400 million in idle funds last July to help manage cash flow in the current fiscal year. Last fiscal year, the state borrowed $600 million.

Estes said Kansas began the current fiscal year with more than $940 million in cash balances, a combination of the $400 million from idle funds and carry-over cash from last fiscal year. But that figure is expected to drop to less than $210 million within two weeks, as the state makes several large payments, including $181 million in bond payments and $197 million in education expenses.

House Appropriations Committee Chairman Marc Rhoades, R-Newton, said his intention in drafting the budget would be to meet the requirement of placing 7.5 percent of state revenues in reserves. But he said legislators may have to consider additional budget reductions to come up with the reserves, depending on the outcome of the Legislature's tax debates.

The committee completed work on a version of next fiscal year's budget Tuesday. It authorizes $14 billion in spending from all sources, including $6 billion from the state general fund, roughly the same as the current fiscal year.

Senators are drafting their own version of the budget and the two chambers will have to reconcile differences, along with changes in the tax code, before completing the 2013 session in early May.

Estes said the state has been able to pay its obligations to schools and other bills on time during this fiscal year, including aid payments to the state's 286 school districts. He said daily cash flow causes the amount of available funds to fluctuate but that those funds haven't been depleted.