Topeka — State spending on schools, higher education and social services would be cut under a no-new-taxes budget plan unveiled Tuesday by two leading Kansas lawmakers.
"The budget outlook is bad, but we don't think it is dire," said Senate President Dave Kerr, a Hutchinson Republican.
The proposal by Kerr and Sen. Steve Morris, R-Hugoton, chairman of the Senate budget committee, relies on cuts, borrowing and payment delays to bridge a projected $426 million budget shortfall during the next 18 months.
It also runs counter to Gov. Bill Graves' position.
Graves has said he will push for increased revenue, including a tax increase, to help bridge the shortfall when lawmakers start the legislative session Monday. The shortfall is the result of falling state revenues and increasing expenses in social services, especially health care for the poor and elderly.
Many lawmakers, including Kerr, have stated they would reject new or increased taxes.
Kerr said because of the current recession, a tax increase would burden Kansans too much.
"Now does not appear to be the time for a general tax increase to balance the state budget," Kerr said.
Morris said the pair's proposal wasn't a "pretty picture," but "it inflicts the least amount of pain possible."
Under the Kerr-Morris plan:
l State funding for the current fiscal year, which ends June 30, would be cut 2 percent except for education and judicial budgets.
l Funding for the 2003 fiscal year, which starts July 1, would be frozen at the 2002 level.
l Public schools would be cut about $24 million, or 1.2 percent. That would equal about $39 per student in base state aid this fiscal year.
l Regents universities, including Kansas University, would be cut 1.2 percent, or about $8.5 million.
l Another $46 million for higher education reforms, which was promised in 1999, would be delayed one year from 2003.
l The so-called rainy day fund or general fund balance required at the end of each fiscal year would be reduced from 7.5 percent to 5 percent, which would free up about $104 million.
Emergency response
Kerr said he has opposed raiding the ending balance in the past, but economic problems stemming from the Sept. 11 terrorist attack warrant using the funds.
"If Sept. 11th wasn't an emergency, I don't know what is," Morris said.
Senate Minority Leader Anthony Hensley, D- Topeka, rejected Kerr and Morris' attributing the state's budget crunch to the Sept. 11 terrorist attack.
"I just got through looking at the numbers," Hensley said. "Back in 1998, we had a surplus of $736 million. That represented a 20 percent ending balance. And now we're looking at a $426 million deficit.
"That's a $1.2 billion swing," he said. "You don't lose that kind of money overnight. This has been going on a long time, and it's because we're dealing with an administration that's fiscally mismanaged the budget."
Hensley said the disparities between Graves' plan and the Kerr-Morris plan are "confusing."
He added: "I'm confused as to why the governor and the Senate president and the Republican leadership don't sit down and talk to each other. Now we have competing proposals.
"They run the place," Hensley said, referring to the GOP majorities in both the House and Senate. "You'd think they could sit down with their governor and come up with a plan they both agree on."
Gubernatorial opposition
Duane Goossen, Graves' budget director, said the governor would strongly oppose reducing the ending balance as required by state law. The balance is used in emergency situations to back up borrowing by the state, he said.
The Kerr-Morris proposal would put the state in a "precarious cash-flow position, a risky financial position," Goossen said. Goossen refused to say whether Graves would veto such a proposal.
Goossen said Graves also earlier rejected cuts in the current fiscal year budget because they would be too drastic for social service programs, which have already announced deep cuts in programs designed to help families and children.
Goossen said Graves' balanced budget, which he is required by law to introduce without a tax increase, and the Kerr-Morris plan "is like having an ugly pig contest."
The Kerr-Morris plan also would use $119 million gained from the cuts to pay for increased cases in Medicaid programs.
Caseload growth has increased approximately 19 percent and foster care contract costs have increased 33 percent from what lawmakers approved last year.
Morris said the Legislature must get control of these costs. He said lawmakers would have to make adjustments to service eligibility guidelines.
Staff writer Dave Ranney contributed to this report.
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