Topeka Kansas legislators approved a stop-gap plan Thursday for closing a shortfall in the state's current budget so that its bills are paid on time, but lawmakers and Republican Gov. Sam Brownback still face plenty of tough spending and tax decisions in coming months.
The measure is a first step in tackling budget problems that arose after lawmakers slashed personal income taxes in 2012 and 2013 at Brownback's urging to stimulate the economy. The plan erases most of a $344 million deficit projected for June 30 largely by diverting money from highway projects and other special funds into the state's main bank account to cover spending on education, social services, prisons and other programs.
The Senate approved the bill, 24-13, sending it to Brownback a day after the House passed the same legislation, 88-34. Brownback outlined a plan along the same lines, and he's expected to sign the measure.
Shortly before Thursday's Senate vote, Brownback also took budget shortfall matters into his own hands, announcing that he plans to cut $45 million for higher education and public schools in March. But he offered lawmakers an alternative: withholding $54 million from public schools instead.
Top Republicans said lawmakers had to pass some kind of short-term budget fix by Feb. 13 to ensure that the state continues paying its bills on time. Even with the bill's enactment, the state would face a tiny deficit — about $800,000 against projected spending of $6.3 billion — at the end of June because tax collections fell short of expectations through January.
The bill would divert $158 million in highway funds, leading to a delay in some road resurfacing, highway reconstruction and bridge repair projects. The state also would short its contributions to pensions for teachers and government workers by $58 million.
Lawmakers could rethink the past income tax cuts or increase other taxes, but new revenues wouldn't be raised quickly enough to help with the current budget.
Brownback and lawmakers also must tackle a projected shortfall of nearly $600 million in the budget for the next fiscal year, beginning July 1, against projected spending of $6.4 billion. Brownback has proposed slowing down future income tax cuts and raising tobacco and alcohol taxes, and many GOP lawmakers want to cut spending.
The state dropped its top personal income tax rate by 29 percent over three years and exempted 191,000 business owners from income taxes altogether. Brownback is proposing to keep those policies in place.