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Archive for Tuesday, February 23, 2010

Kansas senators express strong support for creation of ‘rainy day fund’

February 23, 2010, 8:43 a.m. Updated February 23, 2010, 5:44 p.m.

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— Members of a Kansas Senate panel expressed strong support Tuesday for a proposed amendment to the state constitution that would create a “rainy day” fund in the budget.

The plan, pushed by two members of the Senate Ways and Means Committee, would force legislators to automatically set aside a percentage of Kansas revenues when collections exceed projections. Called a budget stabilization fund, the money would be tucked away earning interest until the budget reached dire levels.

“The other caveat is that legislators can only take out enough to fill the hole,” said Sen. Laura Kelly, a Topeka Democrat, and co-sponsor of the amendment with Sen. John Vratil, a Leawood Republican.

The committee heard testimony about the plan on Tuesday, but took no action.

If approved by voters, the provision would take effect in 2011. If the state collected more than 3 percent in excess of revenue projections for a given year, up to 1 percent would be placed in the reserve account. In years revenues declined or increased by less than 3 percent, nothing would be set aside. The fund would be capped at 7.5 percent of total revenue collections.

Researchers estimate that had the account been in place since 1991, the state would have $465.7 million in reserve, more than enough to plug the projected $416 million hole in the 2011 budget.

Sen. Dwayne Umbarger, a Thayer Republican, said the provision would remove election year politics from the budget process and could smooth out financial fluctuations.

The issue has come up as the Republican-controlled Legislature and Democratic Gov. Mark Parkinson struggle to find a solution to a budget gap that is projected to reach $416 million in the next fiscal year.

Parkinson has endorsed the amendment, although it doesn’t require his signature to go on the November ballot.

State Treasurer Dennis McKinney testified in support of the proposal. McKinney, the former House minority leader from Greensburg, championed such reserve accounts as early as 1998, but they never advanced.

“Perhaps, in part, because I didn’t do a good enough job selling the idea,” McKinney said. “Perhaps also because, in our election cycles, we have trouble thinking long term. It is politically more expedient to cut taxes or fund new programs.”

Senators approved a similar measure last year that is awaiting action on the House calendar.

Kelly said the stabilization fund would allow governors and legislators to avoid making damaging cuts, such as the treatment and rehabilitation programs slashed by the Department of Corrections.

“This will slow us down in building up those programs, but this will protect us also,” Kelly said.

However, senators noted that there are special funds for transportation, education and fees collected by certain agencies that are raided routinely by legislators looking for money, even in good years.

“You just know how things go. There will be efforts to get their hands on that money somehow,” said Sen. Pat Apple, a Louisburg Republican.

But Kelly noted after the hearing that spelling out the rules for a rainy day fund in the constitution would prevent legislators from dipping into those dollars on a whim.

Comments

parrothead8 4 years, 7 months ago

Headline: Kansas Senate to consider creating ‘rainy day fun’

I like to have fun on rainy days. One of the things I like to do is wear big ol' puddle stompin' boots and run around town stomping on puddles. The puddles don't seem to mind, and I have a blast. Anyway, that's my suggestion.

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Jonathan Kealing 4 years, 7 months ago

Sorry. Browser crashed midway through posting so I was in a hurry to get it the second time around. All fixed.

Cheers, Jonathan

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just_another_bozo_on_this_bus 4 years, 7 months ago

And to fund it, they're going to decrease school funding by another 10%.

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wysiwyg69 4 years, 7 months ago

I beleive it has been raining for some time already.

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kusp8 4 years, 7 months ago

At last! Kansas' Legislature can start to use common sense; it's just a couple of generations too late.

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50YearResident 4 years, 7 months ago

"The proposal would require the state to set aside some revenue in special reserve accounts, for use only in dire budget situations."

Use in Dire budget situations, Hello! Wake up! We are in the dire budget situation right now so any funds you have available need to be used "Now".

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billbodiggens 4 years, 7 months ago

They already have such a fund. They have both refused to fund it properly and have stolen from it for their pet projects. This is the same as they have done with the retirement funds. Unprincipled thieves. Hope they enjoy their new fancy offices and new covered parking so they can be royalty for three months out of the year. Maybe the homeless can live in their parking structure the rest of the year?

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billbodiggens 4 years, 7 months ago

What this amounts to is the legislature proposing an amendment to the constitution to hold the legislature in line. Why do they not just act responsibility? Yes, I know that question was stupid.

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LogicMan 4 years, 7 months ago

"to consider creating ‘rainy day fund’"

Better late than never. Given the current financial crisis create the process but don't start funding it until the economy improves, and annual tax receipts go up. For example 10% of increases, compared to this year as a base, would go into the fund. The fund, and its earnings, could only be tapped if approved by all three branches of government; it's far too easy for the gov and reps to spend money, so the supreme court would have to independently confirm a crisis declaration that requires spending from the fund.

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frank mcguinness 4 years, 7 months ago

How about fixing the state employee retirement fund (kpers).

Naww that would only help the state. Keep worrying about, stupid not important social issues like K2, Marriage waivers, Covenante Marriage, and more.

Kansas as Dumb as you think.

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ralphralph 4 years, 7 months ago

No. No. No. You can't give them the ability to take more of your money, ahead of time, in case they decide they need it later. They will ALWAYS decide they need it.
I would rather have some money left in my own pocket, in case I need it.

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sourpuss 4 years, 7 months ago

It will never work. Every time Kansas runs a surplus, the Republicans lower taxes, so there is no buffer for when times are harder and then no one is willing to raise taxes.

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