Topeka State officials have been bracing for the financial implications on Kansas if the federal government fails to raise the debt ceiling by Tuesday.
How much money would be lost or delayed and the impact on government programs is unclear, but agency officials said they are expecting at least some delays in the availability of funds.
Gov. Sam Brownback told The Associated Press that state officials haven’t yet identified any specific programs that would have to be shut down or curtailed. But he said he’s asked agencies to identify where they’re most dependent on federal funds.
“That’s what I’m saying to our folks — let’s prepare,” he said.
Brownback, a former Republican U.S. senator, said he and officials in his administration have been discussing for months what they see as the likelihood that the state will receive far less federal funds going forward.
What isn’t clear is how failure to increase the federal debt limit would impact services for the disabled, low-income residents or Kansas students preparing to head back to classes in the coming weeks.
Funds for providing services
Some state agencies have requested additional federal funds to tide them over if Congress and President Barack Obama fail to reach an agreement by the Tuesday deadline.
Rachel Witten, spokeswoman for the Department of Social and Rehabilitation Services, said the agency typically draws down $1.5 million daily from federal sources. The agency requested permission from the governor and the Department of Administration to seek an additional $15 million ahead of Tuesday’s deadline.
Witten said the additional funds would give Kansas a two-week cushion should federal spending be halted.
Kansas received good news in July that it collected $23.3 million more in tax revenue than anticipated, giving the state additional funds to keep providing services.
Impact on Medicaid
Medicaid payments, about $1 billion in the current year, are administered by a division of the Kansas Department of Health and Environment.
“We won’t know the impact on Medicaid providers until a decision has been made by Congress and the president,” said KDHE spokeswoman Miranda Myrick. “While we’re watching this closely and considering our contingency plan, we do not want to speculate.”
Brownback said he’s confident that the federal government will have funds to pay its debt, but the issue will be how it manages its cash flow going forward.
Higher ed officials waiting
The debt crisis also is weighing on the minds of state university officials as the fall semester approaches.
“We’re obviously concerned and so are our students,” said Larry Moeder, director of admissions and student financial assistance at Kansas State University.
Moeder said the university is letting students know that there is a lot of time before classes start Aug. 22 and the situation could all be resolved. Seventy percent of Kansas State’s students receive some level of financial aid, either grants, loans or scholarships totaling $200 million.
Dale Dennis, deputy commissioner of education, said school districts could draw on reserve accounts to offset a loss of federal funds. The state Department of Education distributes between $5 million and $7 million in summer months to schools, a figure that can increase to as much as $28 million to $30 million in peak months of the school year.