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Archive for Sunday, August 16, 2009

Group: $2B in state funds unused

August 16, 2009

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— A Kansas think tank says the state has amassed almost $2 billion in unused money during a time of financial difficulty.

The Wichita-based Flint Hills Center for Public Policy this week reported that it found the money in 1,658 special revenue funds controlled by state agencies.

The funds include unemployment compensation taxes paid by employers, fees paid by barbers and dentists to oversee their industries and general revenue that agencies failed to spend last fiscal year.

The center says those extra dollars shouldn’t have been collected and would do more good in the general economy. State lawmakers who oversee the budget said they didn’t know how much money was in the special revenue funds.

“Government bureaucracy grows so much that it’s impossible for budget policymakers to know what’s going on in every department,” said Rep. Kevin Yoder, an Overland Park Republican and chairman of the House Appropriations Committee.

State budget director Duane Goossen, however, cautioned that the money in those funds have strings attached.

“Not all of these funds are alike,” he said. “There are many different reasons why there may be money in a particular fund.”

The Flint Hills Center asked certified public accountant Steven Anderson to examine the revenue funds from 2003 to 2009. In the report, he says that total unencumbered cash grew from $943 million at the end of fiscal year 2003 to $3.2 billion at the end of the 2008 fiscal year.

Anderson said state agencies had a tendency to build up surpluses in good years and then spend the cash during economic declines. For example, the amount of money in the funds fell by $1.2 billion during the fiscal year that ended June 30.

Meanwhile, the state’s pool of general tax dollars and reserves has dipped because of declining tax revenue.

Earlier in the fiscal year, then-Gov. Kathleen Sebelius pushed to sweep $30 million from special revenue funds into the general fund to make up for declining tax dollars. But conservative legislators, led by House Speaker Mike O’Neal, a Hutchinson Republican, opposed the move.

Goossen said it was oversimplification to add all the funds together or view those extra dollars as unnecessary. “That money is put into a fund for specific purposes,” Goossen said.

For example, he said the unemployment fund used to provide benefits to out-of-work Kansans needed a surplus when the unemployed rates increased.

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