Topeka Kansas delayed half of the aid payments due to its public school districts at the start of the new year for a few days because of concerns about a short-term cash crunch, an official confirmed Tuesday.
Elaine Frisbie, deputy state budget director, told The Associated Press that $98 million in funds that normally would have reached school districts Monday won't get to them until the end of this week. The state paid the other half of the aid on time.
She said the state decided to be cautious after its tax collections in December were about $22 million short of expectations. Postponing part of the aid to schools allowed the state to avoid a delay in meeting other financial obligations, such as paying bills from health care providers for services to needy Kansans under the Medicaid program.
It's the first time since the state's fiscal year began July 1 that the state has delayed aid payments to its 293 school districts, but it regularly delayed them during the previous fiscal year. Frisbie said it's possible that if state revenues continue to fall below expectations, schools will see similar delays in February and March, as the state waits for revenues to catch up with bills that have come due.
"We knew at the end of last month, as the month was closing, we were down on taxes," Frisbie said. "We were taking the cautious approach."
Deputy Education Commissioner Dale Dennis said the delay isn't likely to cause problems for districts because the money will arrive Friday. But he said districts could face difficulties if the delays become longer in future months.
Dennis noted that in December 2009, the state delayed half of its scheduled aid payment for several weeks, and the state had to make special arrangements for six or seven districts so that they could continue to meet their payrolls.
As for this month's short delay, Dennis said, "We'll be OK."
Still, such delays have become a source of aggravation for superintendents and other educators. Mark Desetti, a lobbyist for the Kansas National Education Association teachers union, said districts' payrolls are the majority of their budgets.
"One would hope that it would stop soon," Desetti said of the delays. "At some point, it's conceivable that it's a challenge to meet payroll. That's why school administrators are so anxious about this all the time."
Frisbie said the state avoids delaying payments to Medicaid providers because it doesn't want them stop participating in the program, which is funded jointly by states and the federal government. Also, Medicaid is administered by states under federal rules designed to prevent delays in payments.
In November, the state did postpone a $15 million payment until December to the Kansas Bioscience Authority, for its efforts to nurture emerging biotech companies. And the state has delayed quarterly contributions in the past to pensions for teachers.
"We've never held a Medicaid payment," Frisbie said. "We always make payroll."
The latest, short delay in school aid payments come as Gov.-elect Sam Brownback and legislators wrestle with the state's ongoing budget problems. The projected gap between projected revenues and current spending commitments is expected to exceed $500 million for the fiscal year that begins July 1.
The projected gap results largely from the expected disappearance of federal economic stimulus funds, which the state has used to prop up aid to schools and social services. Some legislators have discussed allowing districts to tap reserve funds for general operations, to offset the loss of federal stimulus funds.
But Mark Tallman, a lobbyist for the Kansas Association of School Boards, said districts are using reserve funds now to tide themselves over temporarily when the state is late in making its aid payments.
"Districts have learned to their frustration that the scheduled payment date is at best a goal," Tallman said.