Kansas Senate passes budget that includes cuts to KU and student financial aid

Republican Sen. Julia Lynn of Olathe and Sen. Tom Holland, D-Baldwin City, debate a proposed amendment to a budget bill the Senate passed Wednesday. The bill now goes to the House where GOP leaders have had trouble finding a majority to support their budget bill.

? The Kansas Senate on Wednesday passed a preliminary budget bill that funds most state government agencies for the next two years, even though it cannot be funded without significant tax increases that neither the House nor Senate have started to address.

The final budget lawmakers are expected to pass in May could look far different, depending on how large of and what types of tax increases the Republican-dominated Legislature is willing to pass to fill in the gaps.

The bill includes a $9.4 million cut over two years for funding of the Lawrence campus of Kansas University.

It also includes a large-scale reallocation of student financial aid money between public and private institution students that Board of Regents officials say will mean more than 3,000 students at public institutions will no longer be eligible for that aid.

But the bill is still a long way away from becoming law. It now heads to the House, where Republican leaders have been unable to find enough votes to pass their own budget bill.

The House will have a choice when it returns Monday whether to continue trying to pass its own bill or go straight to conference committee on the Senate bill.

“After the weekend we’ll know what the Senate bill looks like. I don’t know that we’ve discerned which direction we’re going,” said House Republican leader Jene Vickrey of Louisburg.

The bill passed 26-13. Sens. Marci Francisco of Lawrence, Tom Holland of Baldwin City and Anthony Hensley of Topeka, all Democrats representing portions of Douglas County, voted no.

The big picture

The Senate bill includes funding for everything in state government except K-12 public education, which both chambers approved earlier this month in a separate bill, and the judicial branch, which the Senate plans to include in a separate bill to be debated later.

All told, the Senate plan calls for spending about $6.4 billion from the state general fund each of the next two years and, according to an analysis by the Legislature’s research office, would leave the state with small but positive ending balances each year.

But those balances assume lawmakers will pass the tax increases and other measures Gov. Sam Brownback proposed as part of his budget, and they do not take into account the revenue shortfalls that have occurred this year.

Sen. Laura Kelly of Topeka, the ranking Democrat on the Senate budget committee, said that when those and several other factors are taken into account, the budget would exceed projected revenues by nearly $500 million next year and $960 million the following year.

“I don’t know how we vote for something like this,” Kelly said. “In the 11 years I’ve been here, we have never voted on a budget that doesn’t balance.”

But Sen. Ty Masterson, R-Augusta, who chairs the Ways and Means Committee, said the bill that passed Wednesday is only a starting point in negotiations with the House and that questions about revenues will be addressed later in the session.

“The truth is, we’re going to send a budget over, and we have work to do on that,” Masterson said. “This body is not passing a budget until we pass a conference committee report at the end of the day.”

Higher education funding

The $9.4 million cut to the KU campus started out in a Ways and Means subcommittee as a swap between the Lawrence campus and the KU Medical Center’s Wichita campus.

But in a later meeting of the full committee, the swap was converted into a straight cut to the Lawrence campus.

Sen. Tom Arpke, R-Salina, who pushed for the cut, said that was meant to reflect the declining enrollment at the Lawrence campus over the past few years.

But Sen. Francisco argued that by many measures, KU has outperformed many of the other Regents institutions.

“In the last two years, the University of Kansas at Lawrence has received approximately 24.5 percent of the Regents block grant, but produced 28.5 percent of the degrees,” Francisco said. “At present, state appropriations constitute 15 percent of the budget for the University of Kansas at Lawrence, and that’s the smallest percentage of all of the Regents institutions.”

But there was no effort to amend the bill to restore the cut due to a procedural rule in the Senate known as “PAY-Go,” or “pay as you go,” which says any amendment that increases spending in one line item must be accompanied by a corresponding reduction or savings in another area.

“Where are we going to find $9.4 million?” Sen. Kelly asked.

Meanwhile, the bill also changes the way “comprehensive grant” funds are allocated between public and private institutions in Kansas.

Traditionally, those need-based awards have been split evenly between the public and private school students. But the Senate bill requires that going forward, 75 percent of the $15.4 million available be awarded to private institution students and only 25 percent to public institution students.

That provision was also pushed by Sen. Arpke of Salina, who said the grants make up less than 1 percent of the state’s total higher education budget, while the private schools produce 20 percent of all the bachelor’s degrees and 24 percent of all the master’s degrees awarded in Kansas.

Board of Regents officials estimated that change will result in a total loss of $5.3 million in funding for grants at public institutions, resulting in 3,521 fewer students receiving those grants.

KU would lose about $1.17 million in grants, resulting in 880 students losing funding, according to the Regents estimates.