Topeka The 2001 Legislature will be haunted by ghosts from 1999 when members start work on the next state budget.
Neither Gov. Bill Graves nor legislators expect next year's session to be as tough as the 2000 session, when a round of belt-tightening was needed because the state had increased its spending too much while cutting taxes generously. But they'll start their work with trying to fill in a big hole they created for themselves.
Senate Ways and Means Chairman Dave Kerr, R-Hutchinson
Two years ago, Graves and the Legislature embarked on a new transportation program, reorganized the higher education system and created a trust fund for children's programs. Those decisions will restrict their decision making after the Legislature convenes Jan. 8.
The Legislature made several years' worth of promises in 1999 and now faces keeping them in a year when it might be more convenient to break them though no one is suggesting such a thing.
"They were long-term commitments to the people of Kansas," said Senate Minority Leader Anthony Hensley, D-Topeka. "We ought to honor those commitments."
Graves and his staff are putting together his proposed budget for the state's 2002 fiscal year, which begins next July 1. He will outline its contents to legislators after they convene.
So far, the news has been significantly better than it was a year ago.
First, Kansas ended its 2000 budget year on June 30 with $42 million more in its general fund than expected.
The $4.7 billion general fund is the largest source of money for Kansas government programs and where the state deposits most of its tax revenues. For most legislators, the general fund is what matters in budgeting and all else is secondary.
From July 1, when fiscal 2001 began, through the end of September, the state collected $15.5 million more than expected if a $19.5 million "accounting adjustment" announced by the Department of Revenue is taken into account.
The adjustment corrects a computer error that credited too little from the general fund to another fund used to remit sales tax revenues to cities and counties.
The state officials, legislative staff and university economists who make up the Consensus Estimating Group produce the state's official revenue estimates, which Graves and legislators must follow in putting together the budget.
Budget Director Duane Goossen said Graves, his staff and legislators won't know how good the budget picture is until the group makes its predictions in November. But he and others are sure of one thing.
"It's not going to be more difficult than last year was," Goossen said.
Little room for growth
Yet the fiscal 2002 budget should be tighter than steady economic growth and continued low unemployment rates would suggest.
The Kansas State Board of Education and education groups already are putting pressure on legislators to increase spending on public schools by $200 million or more. That kind of money isn't expected, short of a tax increase or scrimping elsewhere.
"If there are going to be other significant enhancements to the budget, something has to give someplace else," Goossen said.
Goossen said the state must address increasing caseloads for social service programs. By federal law, the state is required to serve all people eligible for some programs, including nursing home care, and the bill is expected to increase at least $20 million in fiscal 2002.
Also, the state faces resuming $18 million in annual payments to a fund that pays benefits to the families of deceased or injured state workers. Graves and the Legislature suspended those payments during fiscal 2001 because the fund's balance was higher than necessary.
But the 1999 decisions loom even larger.
The 1999 transportation program, which will repair highways, improve public transit, help rural airports and aid shortline railroads, will spend more than $13 billion over 10 years.
To help finance that spending, legislators built in a series of increases in the amount of sales tax revenues transferred from the general fund to highway projects. The bill from that is $90 million for fiscal 2002 alone.
The children's trust fund is a $60 million commitment. The trust fund is financed by money from Kansas' share of a settlement of lawsuits by states against tobacco companies.
Last year, legislators agreed to put $70 million worth of tobacco money into the general fund, to lessen the state's budget problems. That figure drops to $10 million in fiscal 2002, then to zero in fiscal 2003.
Finally, there's the reorganization of the higher education system, which put community colleges and vocational technical schools under the state Board of Regents. One incentive for legislators and education officials was money, extra funds for university faculty salary increases and to decrease community college property tax levies.
That bill is $21 million for fiscal 2002.
When legislators made their decisions in 1999, they had revenue predictions through fiscal 2000 from the Consensus Estimating Group. Numbers for fiscal 2001 and 2002 were little more than guesses.
"It's always difficult to make decisions for years for which you don't have good forecasts," said Senate Ways and Means Chairman Dave Kerr, R-Hutchinson. "When you make firm plans that go beyond that, you do so with the recognition that you may create tight budget years."