Archive for Friday, November 6, 2015

Kansas slashes revenue forecast, announces immediate cuts, budget adjustments

November 6, 2015, 5:00 p.m. Updated November 6, 2015, 5:59 p.m.

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— New revenue estimates released Friday show Kansas is likely to bring in $159 million less this fiscal year than previously expected, prompting Gov. Sam Brownback’s administration to announce immediate spending cuts and budget adjustments, including another $48 million sweep out of highway funds.

The state’s Consensus Revenue Estimating Group, made up of state budget officials, agency heads and economists from three universities, said that a struggling farm economy, sluggish growth in retail sales and declining oil and gas prices were largely to blame for the downward revision.

Budget director Shawn Sullivan acknowledged that as of Friday the balance in the state general fund was at or near zero. But he insisted the state is not in a fiscal or budgetary crisis, and that the state should not have to delay any payments due to public schools or Medicaid providers.

“One of the things I would (use to) judge whether or not that’s the case is, are we paying our bills, are we paying them in full, and are we paying them on time,” Sullivan said. “And we have. There have not been any late payments since January 2011, as compared to that happening 24 times in the previous eight years.”

Total taxes flowing into the state are now estimated at just over $6 billion for the current fiscal year. That’s only abut $324 million, or 5.7 percent more than the state took in the previous year. But much of that is the result of significant hikes lawmakers approved this year in retail sales and tobacco taxes.

The biggest culprits in that downturn are expected to be retail sales taxes, which have not been meeting projections this year, despite the higher rate; severance taxes, which have fallen due to declining oil and gas prices; and corporate income taxes.

All told, officials said the revised estimates put the state in a projected $118.2 million hole for the current year, which prompted the administration to announce a series of fund transfers and “allotment” cuts. Among the adjustments announced Friday are:

• Sweeping $47.9 million out of the Kansas Department of Transportation’s highway fund.

• Sweeping $9 million out of the Children’s Initiative Fund.

• Reducing pension contributions by $15.7 million, reflecting revised estimates of those costs.

• Reducing Medicaid expenditures in nonmandatory spending by $25.1 million.

• And cutting $3 million out of state subsidies into a fund that draws down additional Medicaid funds for hospitals and nursing homes.

The plan also includes several $14 million in cuts and transfers that will require legislative approval next year, including a $5 million cut to the Kansas Bioscience Authority.

Sullivan said the fund sweep out of KDOT would not affect any major improvement or system expansion projects in the ongoing highway program known as T-Works. But he said it would cause a delay in some of the “preservation” programs that are intended to prevent the need for major repairs in the future.

Legislative Democrats were quick to criticize the administration for what they called fiscal mismanagement of the state’s budget and revenues.

“We’ve just had colossal mismanagement for the last several years by this administration,” said Senate Minority Leader Anthony Hensley, of Topeka.

“We’ve got to go back in and revisit the 2012 and 2013 income tax cut if we’re going to have any future stability within the budget,” he said.

When pressed, Hensley acknowledged that should include both the business and individual income tax cuts that were enacted.

House Democratic Leader Tom Burroughs, of Kansas City, however, continued to insist that Democrats do not need to offer a proposal of their own.

“I don’t think we need to present a plan at this time,” he said. “I think we’ll see what the revenue estimates will be at the end of the year and we’ll move accordingly.”

Republican leaders, on the other hand, tried to cast the revenue numbers in a positive light.

“Kansans are no longer paying the highest work and productivity tax in the Midwest and I am confident we would be in far worse shape had the tax cuts never happened,” Senate President Susan Wagle, R-Wichita, said. “The Kansas Senate is focused on the path ahead — funding core services and making sure the private sector grows, not the government.”

House Speaker Ray Merrick, R-Stilwell, applauded the governor’s actions.

“The American economy is struggling and we’re seeing that here in Kansas,” he said. “The governor recognizes that and made some difficult decisions today. I applaud the efficiencies he found.”

Comments

Richard Heckler 2 years, 7 months ago

"said that a struggling farm economy, sluggish growth in retail sales and declining oil and gas prices were largely to blame for the downward revision."

Nonsense it is reckless management of a states tax dollars all calculated and intentional.

What about the other ALEC controlled states that don't have the alleged identical issues YET their state budgets are also going to hell?

Why would any voter ever vote republican again? Knowing full well why they are doing this to Kansas and the USA.

Larry Sturm 2 years, 7 months ago

Every time you take funding away from social programs and steal funds from the highway dept you are stealing from the people of Kansas And giving it to the rich corporations. We are going to have to pay all this back in the future at a much higher rate.Of course Brownback will be gone by then and our children and grandchildren and great and great great grandchildren will be paying for his experiment.

Brett McCabe 2 years, 7 months ago

Retail taxes are down for two reasons. First, in a shocking development, when you institute a consumption tax, it dampens consumption. Second, without a bump in earnings for the people at the bottom of the scale, spending dips. Without spending, the economy slows. I know, it's like Econ 101, but we have to keep repeating it in order to remember why we are where we are.

What Kansans really need to fend off, though, is the tendency to accept this as the new normal. If we don't fight to increase, significantly, tax rates on the wealthy and corporations, and lower them for low-income people, then our discussions begin to focus on alleviating symptoms rather than eliminating the disease.

One thing is for sure though, the people in Texas can breathe a little easier now.

Larry Sturm 2 years, 7 months ago

Cutting taxes to the rich only creates larger bank accounts for the rich.

Richard Heckler 2 years, 7 months ago

Why would anyone vote republican ever again?

Tax cuts do not and has not created new employment for the same people receiving the tax cuts are certainly among those who have been shipping USA jobs abroad for the past 35 years. In the process congress awarded tax deductions or protections so to speak for those same groups of people.

TABOR fits into this scenario of running out of money to cover the services taxpayers want from government ...... not private investors that which will increase taxes to realize evermore profits.

http://www.dollarsandsense.org/archives/2005/0705rebne.html

and

http://www.dollarsandsense.org/archives/2001/0301miller.html

--- Exposing the Koch/Brownback Agenda to Defund and Dismantle Public Education http://www.huffingtonpost.com/dennis-van-roekel/exposing-alecs-agenda-to-_b_3223651.html

ALEC and Brownback and Supply Side Economics are very much like a pozni scheme aka stealing money from taxpayers.

Why would anyone vote republican ever again?

Greg Cooper 2 years, 7 months ago

You ever read any of his stuff, Bob? Any idea what he cites? Maybe you can do that and then post a comment that has something to do o do with the issue rather than, like the Kansas Repub party, attack the messenger rather than the message.

But, then, actually looking at reality is not something reasonable people expect from you.

Phillip Chappuie 2 years, 7 months ago

“The American economy is struggling and we’re seeing that here in Kansas,” he said. “The governor recognizes that and made some difficult decisions today. I applaud the efficiencies he found.”

I can tell you straight up that Ray Merrick needs to flush out his headgear. Sam Brownback created this economic debacle with bogus tax policy and has created further inefficiencies in many places with his cronyism. It is simple as simple can be, bring back income tax on 300,000 favored citizens.
And now he wants to cut medicaid even further after denying expansion? If you want to save there just get rid of the MCO's that merely cut and paste what others have done and rip out a fee. Brownback equals Epic Fail.

Lawrence Freeman 2 years, 7 months ago

Hey now! brownback is the best governor Missouri ever had!!!

Richard Heckler 2 years, 7 months ago

Ray Merrick is a sitting board for the American Legislative Exchange Council ..... aka ALEC.

He is not a republican only an imposter.

Jim Slade 2 years, 7 months ago

Highway funds- stolen.

Money for children- stolen

Money for elderly care- stolen

Money from state worker's pensions- stolen

Who are the recipients of this stolen cash? The wealthy,

That's YOUR tea party folks. Stepping on the little guy to help out those with big bucks.

Lawrence Freeman 2 years, 7 months ago

I will have to wait and see if Johnson county will vote democratic next election. I've no doubt the democrat's will put back the income tax back on the wealthy, as they should. But I doubt that they will remove the unfair tax on tobacco. As long as that's in place I will continue to shop in Missouri.

Fred Whitehead Jr. 2 years, 7 months ago

Let the impeachments begin!!!! Oh,,,,,wait,,,,,,,,,, those have to be done by the legislators??

Never gonna happen in the Koch Industries Regime Kansas Legislature.

Richard Heckler 2 years, 7 months ago

When these Koch/ALEC/Brownback right wing radicals set forth a policy of operation these policies do not go away. No matter if the policy was set forth 36 years ago.

Which is to say their platform and their destructive goals have not changed since before the big push. The big push came with Reagan/Bush = The Koch/Alec/Americans for Prosperity/NRA/Club for Growth/Chambers of Commerce/Wall Street/The Big Banks and leveraged buyout etc etc etc dynasty has not looked back. These fascist mafia like radicals want to own not only congress ..... try all state legislators and local bodies of government.

Yes they do embrace their golden oldie fascist politics = why vote republican ever again?

Tyler Palmer 2 years, 7 months ago

Merrick, et al, must not have noticed the surge in US employment numbers, the Fed's growing confidence that rate hikes can take place, and frequent reports year after year showing that Kansas lags its neighbors in economic development . It's apparently not the US generally that's struggling, it's Kansas and it's due to our state legislature and governor refusing to acknowledge they are failing the people of this state in a major way both now and for the foreseeable future. The legislature continues to refuse to act, supposedly because of Brownback's veto threats, which shows they are either spineless lapdogs of the governor and not actually representing the citizens that elected them or they are simply too beholden to a failed radical ideology to make reality-based policy decisions....or both. They ought to pass revenue polices that are prudent and necessary that can garner a supermajority and let the governor follow through on what would certainly be a hugely unpopular and wrong-headed veto attempt if he wants to. If Brownback wants to go down in flames clutching his Koch brothers dolls, let him, but don't let him take everyone else (except his wealthy cronies) with him.

Bob Summers 2 years, 7 months ago

2015’s Best & Worst Small Cities in America

Lawrence is 321 out of 1268 small cities looked at.

Bottom 20 are in California.

https://wallethub.com/edu/best-worst-small-cities-to-live-in/16581/

John Sickels 2 years, 7 months ago

Gonna be real interesting when the administration loses the school funding case.

What will Brownie and the legislature due in the face of the inevitable court order to restore school funding?

We are heading towards a serious constitutional crisis.

Michael Kort 2 years, 7 months ago

SURPRISE !!!!!!!........,SURPRISE !!!!!!!!! Even Gomer Pile would have seen this coming ! Ah,........but then brownie and company, are not exactly Gomer Pile ! Gomer Pile was basicly honest and simple.......and basicly trust worthy . Nothing like these actor preppies who are the masters of playing a bunch of right wing rubes to inrich their own selves . There is a differance between a Republican and a bunch of Publicans who serve themselves and their $ backers !

Richard Heckler 2 years, 7 months ago

How does anyone know that the Brownback administration isn't lying about their projections in order to kill the Kansas economy?

How does anyone know that the Brownback administration hasn't been lying about revenue collections over the past seven years in order to kill the Kansas economy?

Considering how bad things have gotten since the Brownback administration took over shouldn't there be a major audit to be sure the numbers are correct?

Michael Kaufman 2 years, 7 months ago

Pretty soon the only people who will stay and live in Kansas, are the people that don't pay taxes.

Richard Heckler 2 years, 7 months ago

Why is Gov Brownback basing his decision on a projection?

Taxpayers the decision is based on a Brownback projection not a solid foundation....

This governor was in Washngton D.C. when two GOP home loan scandals took place? Possibly the governor has no idea what he is talking about?

Rodger Scroggins 2 years, 7 months ago

well Toto, I don't think we're in Kansas anymore!!

Steve King 2 years, 7 months ago

I guess Merrick and Wagle don't read much. While we may have lower employment taxes we have one of the higest sales tax and property tax rates. And taking money from Children's programs is absolutely heinous!

Fron CNN Money: It was a blockbuster month in America for jobs.

The U.S. economy added 271,000 jobs in October, far better thansluggish gains in September and any forecasts and the best monthly gain of 2015. The unemployment rate also fell to 5%, its lowest level since 2008 and half of the 10% rate in the aftermath of the financial crisis. And wage growth finally showed signs of life. Average hourly earnings rose 2.5%, its best pick up since 2009.

Another big improvement was that more part-time workers found full-time work. During the recession the number of people who took part-time jobs but wanted full-time work rose to 9 million workers.

That's now down to 6 million -- a healthy sign.

Lawrence Freeman 2 years, 7 months ago

Don't you know we are not supposed to fact check in brownbackistan? LOL

Richard Heckler 2 years, 7 months ago

Nick Jordan the messenger must not know what he is talking about ....... = Merrick and Wagle and Gov Brownback are not doing their homework BUT INSTEAD following the ALEC Koch Empire Agenda.

Paul R Getto 2 years, 7 months ago

They are following the blueprint: “We advocate the complete separation of education and State. Government schools lead to the indoctrination of children and interfere with the free choice of individuals. Government ownership, operation, regulation, and subsidy of schools and colleges should be ended.” “We condemn compulsory education laws … and we call for the immediate repeal of such laws.”

Richard Heckler 2 years, 7 months ago

I say the Brownback administration is involved in a cover up ....... instead of seeming dumb.

Larry Sturm 2 years, 7 months ago

Brownback's money grab has got to stop or the state will have to file bankruptcy. put the whole republican government in the stockade at Leavenworth for corruption in government.

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