TOPEKA, Kan. (AP) – Kansas has slashed its revenue projections, and Republican Gov. Sam Brownback’s budget director has announced immediate budget adjustments so the state keeps paying its bills on time.

State officials and university economists on Friday issued a new, more pessimistic forecast for state government. The new forecast predicts $354 million less in state revenues from now through June 2017 than previously predicted.

The new forecast created a deficit in the state’s current budget. Budget director Shawn Sullivan immediately announced $124 million in budget adjustments to close the gap and avoid delays in meeting the state’s bills.

The new forecast came hours after the Kansas Supreme Court heard arguments about whether a school funding law enacted earlier this year is valid and whether school districts are owed another $54 million in aid.