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March 17 (Reuters) - A committee of Kansas lawmakers will be charged with reconciling differences in legislation passed to plug a $280 million hole in the state's fiscal 2017 budget after the Senate passed a revised version of a House-approved bill late on Thursday.
Both versions would allow the state to borrow money from a long-term investment fund and delay a payment to the Kansas Public Employees Retirement System. But the monetary amounts and plans to repay the cash differ, J.G. Scott, assistant director for fiscal affairs at the Kansas Legislative Research Department, said on Friday.
Tax cuts enacted in 2012 have gouged a hole in the Kansas budget as revenue failed to meet monthly estimates, although February marked a fourth straight month that collections met or exceeded projections.
Kansas also faces higher education spending in the wake of a recent state supreme court ruling.
Scott said the bills to fix the budget will head to a legislative conference committee probably next week.
The Senate on Thursday rejected three attempts to amend the bill with across-the-board spending cuts of 2 percent, 1 percent and 0.5 percent.
Republican Senate President Susan Wagle contended spending cuts, which would have included primary and secondary public schools, would ease tax hikes the legislature is expected to take up to tackle a $755 million projected budget shortfall over the next two fiscal years.
A move in the state legislature last month to boost revenue by raising tax rates and eliminating a business exemption failed when the Senate was unable to override Republican Governor Sam Brownback's veto.
Complicating Kansas' finances is a March 2 state supreme court ruling that found the school funding system falls short of a constitutional requirement for adequacy. The ruling, which set a June 30 deadline for the enactment of a constitutional funding method, could require Kansas to increase school funding by more than $500 million each year.
Moody's Investors Service and S&P Global Ratings have said the ruling will put increased pressure on the state's already shaky finances.
Meanwhile, resolutions are pending in the House and Senate to put a constitutional amendment on the November 2018 ballot that would require a two-thirds vote by both legislative chambers to pass any state tax increase. The measure also seeks an annual cap on state spending and creates funds for debt payments and a budget reserve.
Scott said previous attempts to put similar measures on the ballot were not successful. (Reporting by Karen Pierog in Chicago; Editing by Matthew Lewis)