With looming cash crisis, GOP leaders see need to fix Kansas budget quickly

? Faced with a looming cash-flow crisis, Gov. Sam Brownback’s administration is urging lawmakers to move quickly on a bill to revise this year’s budget before the state runs out of cash to fund schools and health care programs.

The House and Senate budget committees were shown a new bill Wednesday that the administration says is needed quickly to keep state government operating. It includes some, but not all, of the budget adjustments Brownback requested at the start of the session, and it sweeps even more money out of the state highway fund than previously requested.

“Cash flow gets tight by the middle of February,” budget director Shawn Sullivan told reporters after a briefing in the House Appropriations Committee.

He said that’s when the state is due to send out roughly $95 million to health care providers for Medicaid reimbursements, plus about $45 million in payments to public school districts.

The budget crisis first came to light in November when new revenue estimates were released showing the state would run $279 million short of what it needs to fund the current year’s budget, followed by another $436 million shortfall for the new fiscal year that begins July 1.

In response, Brownback proposed an “allotment” plan that directly cut about $60 million in spending while calling for other kinds of fund transfers and adjusting other kinds of nongeneral fund spending.

The biggest of those was a proposal to sweep $95.7 million from the state highway fund into the general fund. It also called for reducing the state’s contribution into the Kansas Public Employees Retirement System by $40.7 million.

The new bill outlined Wednesday includes many of the items in the allotment plan that require legislative approval. But it also calls for taking an additional $62.8 million out of the highway fund, for a total of $158.5 million.

That highway money, which comes from a combination of sales tax and motor fuel tax, funds the ongoing 10-year, $8 billion transportation program known as T-Works. Advocates for that program submitted written testimony objecting to the fund transfer, but administration officials say the fund sweep will not affect any ongoing highway projects.

The new budget bill also includes an across-the-board, 4 percent cut from most state agencies’ operating budgets for the final six months of the fiscal year, which totals $18.4 million from all funds, but only $562,000 from the state general fund.

The bill also includes a number of spending increases, including $46.2 million in general fund spending for increased costs in human services such as Medicaid and welfare, and an additional $2.9 million to fully fund a technical education program that pays the cost of tuition for high school students taking career training courses at Kansas community colleges.

The net impact of the bill would be to increase general fund spending by $42.9 million. It would increase total spending from all funds, including fee funds and federal aid, by $151.6 million.

J.G. Scott, chief fiscal analyst for the Legislative Research Department, said other items in the allotment plan will be considered later in what’s called the “mega” appropriations bill, which will adjust the current year’s budget and establish spending for the next two fiscal years.

Among the items not included, but which reportedly will be in the later bill, is the additional $53 million needed to fully fund the K-12 school finance formula. That’s the additional money needed for equalization aid to poor districts for their capital outlay and local option budgets.

The bill presented Tuesday is more of a stop-gap bill to cover immediate cash-flow needs, Scott said.

Rep. Ron Ryckman, R-Olathe, who chairs the House committee, said he intends for the panel to start working on the bill right away and hopes to move some version of it to the full House by Monday. But he couldn’t predict how the other members of the House will react.

“We’ll decide how many people in this building want to be part of the solution,” Ryckman said.