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Archive for Tuesday, March 15, 2011

Senators critical of Kansas ‘off-budget’ spending

March 15, 2011

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— Senators raised questions Tuesday about the amount of Kansas government expenditures considered "off-budget" that rarely face public scrutiny.

Members of the Senate Ways and Means Committee reviewed a list of items detailing expenses and revenues that aren't part of the state budget discussion.

As reported Sunday by the Associated Press, there are more than $1.3 billion in expenditures each year that aren't part of the budget process. They include pension payments to retirees, operation of the University of Kansas Hospital Authority, a property tax refund program and the Kansas Bioscience Authority.

The reporting was part of AP's series of articles related to Sunshine Week in open government across the country.

Senators asked legislative staff for more information about the expenditures and the policy decisions behind each item. Senate Ways and Means Chairwoman Carolyn McGinn, for example, asked for more information about a fund dedicated to an aviation project in 2009. None was immediately available.

Senate Vice President John Vratil said the question proved the point about lacking details and follow through on the results of off-budget expenditures.

"I think there is something sincerely wrong about our system where we spend $1.3 billion and have no clue where it goes," said Vratil, a Leawood Republican.

J.G. Scott, chief analyst for the Legislative Research Department, said many items that are off-budget are expenditures between agencies. They include such items as documents prepared by the state printing plant, maintenance, information technology and health care.

Such items already were accounted for in agency operating expenditures, he said, but taken off-budget for accounting purposes so as not to double count the funds. Other items were removed for policy reasons, such as to reduce the overall size of the state budget that would increase the requirement for a 7.5 percent positive ending balance of state funds.

One of the largest items is pension benefits paid to retired state employees and teachers who participate in the Kansas Public Employees Retirement System. The expenditure was taken off-budget in 1999 when $472 million was spent. Analysts say that expenditure is $1.2 billion in 2011.

"I like where we're headed, quite frankly," said Sen. Ty Masterson, an Andover Republican. "It certainly amplifies the situation that we are in with the unfunded liability."

It is estimated that the pension fund has at least $7 billion in unfunded liabilities owed long-term to retirees. Legislators and Gov. Sam Brownback have made fixing the system a priority this session.

Sen. Laura Kelly, a Topeka Democrat, asked about one of the many funds on the list, the rental motor vehicle excise fund. The analyst didn't know for certain, or its purpose.

The fund was created in 1991, charging a 3.5 percent tax on rental cars and trucks used for less than 28 days. The tax exempts moving trucks used for short-term trips, such as personal moving. About $3.2 million is collected and distributed to the counties where the rental occurred by the state.

Kelly said while those on the budget committees are able to get information about budget items as they debate spending bills each session, many of the items moved off budget never come up for discussion after they are initially are approved, and then usually if there is a problem.

McGinn said she would like to have more information about the list of items presented to the committee as it continues to work on the 2012 budget and other issues.

"Perhaps we should have a subcommittee on off-budget items," she said.

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