Archive for Wednesday, April 20, 2016

Brownback administration proposes massive cuts to cover Kansas’ projected revenue shortage

Cuts include $4 million each year for Kansas University and $3.2 million for the KU Medical Center

Kansas Statehouse in Topeka, February 2014.

Kansas Statehouse in Topeka, February 2014.

April 20, 2016, 8:17 a.m. Updated April 20, 2016, 8:01 p.m.

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— Gov. Sam Brownback’s administration is proposing to cut $112.8 million in state spending out of what’s left in the current fiscal year, with possibly even more cuts in the next fiscal year that begins July 1, in order to balance the state budget in the wake of sagging state revenues.

At the same time, though, Budget Director Shawn Sullivan dismissed the idea, now endorsed by a large number of Republican lawmakers, of scaling back some of the tax cuts Brownback championed in 2012 and 2013.

“We hear all the time of businesses that have moved here,” Sullivan said in defense of those tax cuts. “We believe they have positively affected the economy.”

The proposed cuts are the administration’s response to a new report issued Wednesday in which state budget officials lowered their estimate of how much revenue the state will take in this year and next year by $228.6 million.

That includes a $93.9 million reduction for the current fiscal year, which ends June 30, and another $134.7 million for the new fiscal year that begins July 1.

Looking only at tax revenue coming into the state, the new forecast is $347.8 million below the previous estimate, which was released in November. But that figure is offset by increases in other nontax revenue sources, as well as previously-approved transfers into the general fund from other funds.

Raney Gilliland, who heads the Legislature’s nonpartisan Research Department, said the new, lower estimates reflect a more pessimistic forecast of the Kansas economy overall, citing depressed prices for agricultural commodities as well as oil and gas. He also said officials have lowered their expectations about growth in Kansas employment and personal income.

“And then you couple that with some of the overall weakness in the worldwide economy and some unknown factors, all of those factors are included, in addition to a list of many other factors, that are considered in the revenue-estimating process,” he said.

The biggest contributors to the lowered estimates were the forecasts for individual income taxes, which officials lowered by $233 million over both fiscal years, and retail sales taxes, which were lowered by $60 million.

Overall, the new forecast predicts total revenues flowing into state coffers to be just over $6 billion this year, or 2.4 percent more than in Fiscal Year 2015, and almost $6.2 billion in the next fiscal year.

By law, both the governor and Kansas legislators are required to use those estimates in crafting the state’s budget each year.

At a Statehouse news conference, Sullivan outlined three options for balancing the budgets for both fiscal years.

Shawn Sullivan, budget director for Kansas Gov. Sam Brownback, discusses proposals for keeping the state’s budget balanced, during a news conference, Wednesday, April 20, 2016, at the Statehouse in Topeka, Kan. Brownback plans to delay highway projects and impose additional spending cuts at state universities (AP Photo/John Hanna)

Shawn Sullivan, budget director for Kansas Gov. Sam Brownback, discusses proposals for keeping the state’s budget balanced, during a news conference, Wednesday, April 20, 2016, at the Statehouse in Topeka, Kan. Brownback plans to delay highway projects and impose additional spending cuts at state universities (AP Photo/John Hanna)

All three options include extending for another year the 3 percent “allotment” cut to state universities, which Brownback ordered for the current fiscal year in response to monthly revenue shortfalls in February. That amounts to more than $17 million each year for all six state universities, including more than $4 million each year for Kansas University and $3.2 million for the KU Medical Center.

All three options also include sweeping $70 million this year and $115 million next year out of the state highway fund. That represents virtually all of the general sales tax revenue that is currently earmarked for highways, and it would mean delaying all future highway expansion projects that are slated as part of the 10-year transportation plan known as T-Works that lawmakers first authorized in 2010.

That would not affect the ongoing South Lawrence Trafficway project or the “Gateway” project in Johnson County because contracts for those have already been awarded, Sullivan said.

In addition to those measures, Brownback’s “Option 1” calls for selling off part of the state’s interest in future tobacco settlement money to raise an estimated $158 million in the next fiscal year, a process known as “securitization,” which lawmakers have previously dismissed out of hand.

Sullivan said the plan calls for keeping roughly $42 million a year in tobacco money, which is currently used to fund children’s programs, including early childhood education and health screenings. And while he conceded it would represent only “one-time money” and would not address the structural shortfalls in the state budget, he said it would be enough to give lawmakers time to address those structural issues through savings and efficiencies that were recommended in a recent report by the consulting firm Alvarez & Marsal.

Still, advocates for those children’s programs said they oppose any attempt to securitize the tobacco settlement.

“Why would we permanently destroy our state’s thriving legacy for early childhood education in exchange for a temporary, one-time budget fix that does nothing to solve the problem?” asked Shannon Cotsoradis, president and CEO of the advocacy group Kansas Action for Children. “Kansas babies and toddlers didn’t create this budget crisis, and they shouldn’t be forced to pay for it.”

Sullivan called Option 1 the governor’s preferred option, but he offered two other scenarios that would likely stir even more controversy.

Under Option 2, in addition to the higher education and highway cuts, Brownback proposes delaying the scheduled repayment of about $92 million, plus interest, to the Kansas Public Employees Retirement System, which Brownback delayed earlier this month in the wake of another monthly revenue shortfall in March.

And under Option 3, he proposes across-the-board spending cuts of 3 percent to 5 percent for all state agencies, including K-12 education and Medicaid.

The cuts to education would not include state aid for bond and interest payments or for “equalization aid” mandated by the Kansas Supreme Court. But it would affect the general block grants that schools now get and would raise new questions about whether the state is providing adequate funding for schools, as required under the Kansas Constitution.

“I’m sure the Legislature would need to consider that,” Sullivan said.

Kansas Democrats were quick to criticize the governor’s plan.

“I think the first thing we should consider is changing the name of our state to the State of Denial, because that’s what this is all about,” said Senate Democratic Leader Anthony Hensley, of Topeka. “They are denying that the tax experiment has been an abject failure, and it’s caused this ongoing budget crisis that we’re in.”

“None of the three options proposed by Gov. Brownback address the underlying problem — a lack of revenue,” said House Minority Leader Tom Burroughs, of Kansas City. “In fact, these short-term ‘fixes’ create a larger long-term problem. Kansans are going to be paying for the mistakes of the Brownback administration for years to come. The only question is how much it will cost.”

The House and Senate budget committees will begin reviewing the new budget numbers and consider the governor’s three options when they get together Thursday and Friday.

Those meetings come in advance of the full Legislature returning to the Statehouse next Wednesday for the start of their wrap-up session.

Comments

Steve King 1 year, 10 months ago

Don't forget. Sam has blamed Obama, Global Economics and Santa Clause.

Jay Keffer 1 year, 10 months ago

Ah, the Santa Clause.

Better Call Saul lawyers are having trouble finding the precedent that sets.

Howard Hamlin will be in touch.

Larry Sturm 1 year, 10 months ago

The legislature needs to pass a bill reinstating the income taxes and over ride a veto.

Brett McCabe 1 year, 10 months ago

That would take courage so, sadly, it won't happen.

Tony Peterson 1 year, 10 months ago

I'm not holding my breath but this report might be what it takes for the Legislature to at least start considering the idea that Brownback should be impeached. Even his former cohorts and supporters aren't happy with how his policies have played out.

Tony Peterson 1 year, 10 months ago

And they're all up for re-election this year. Even if they went along with the original tax plan they could make him the sacrificial lamb to save their own political skins.

Ed Clemensen 1 year, 10 months ago

One down is better then nothing and they would know that they were next if things didn't change.

Calvin Anders 1 year, 10 months ago

Brownie is just going to keep making up new excuses and new targets to blame for this disaster. But notice that implicit in all of his excuses, the nod and wink in all of his attempts to focus blame elsewhere, is the idea that this is all part of the plan. He wants it to be obvious to his base that he really does enjoy the opportunity to reduce the size and spending of government. He knew that his plan would result in a huge drop in revenue. That was the point. The whole point was to make enough holes in the ship that he could argue that we need to start throwing off passengers to keep the ship afloat.

Ed Clemensen 1 year, 10 months ago

Tis the Republican way, they are right because they are the right, and their rights trump everyone elses

Richard Heckler 1 year, 10 months ago

Sam Is setting up Kansas for bankruptcy. That's right bankruptcy. All premeditated before Sam was elected governor. Bankruptcy is an ALEC agenda item for all state governments as a means to justify privatization.

Shouldn't ALEC politicians be subject to federal investigations?

Never Ever Vote GOP Again !

Tony Peterson 1 year, 10 months ago

Bingo. I've thought for a long time that bankruptcy was was the ultimate goal so that as much as possible could be sold off and privatized in the name of "saving" the State. Anyone with an ounce of budgeting and finance experience could see that his plan was never going to work.

Ed Clemensen 1 year, 10 months ago

Hey it works, Just for the special people, like you pointed out.

Steve Jacob 1 year, 10 months ago

No state bankruptcies! We did not bail out California, we will not bail out Louisiana or Illinois.

Tony Peterson 1 year, 10 months ago

Louisiana hasn't declared bankruptcy but it's in the same hole Kansas is now. Both states have been doing the equivalent of paying a credit card bill with another credit card and then using another credit card to pay that one. Eventually it catches up.There's a certain point where there aren't enough credit cards to use or things to sell off to pay the bills.

Ed Clemensen 1 year, 10 months ago

All three were brought there by Republican ethics. At least California had Brown to get them out. But we still have some of the same Republican Senators, their specila interests keep them going.

Ed Clemensen 1 year, 10 months ago

All three were brought there by Republican ethics. At least California had Brown to get them out. But we still have some of the same Republican Senators, their special interests keep them going.

Bob Forer 1 year, 10 months ago

The people deserve the government they elect. Tragically, you can't fix stupid.

John Sickels 1 year, 10 months ago

The only solution is either raise taxes, or start shutting down entire departments and eliminate more school funding.

The thing is, I don't think the legislature has the votes for either option, so they are going to hope Brownie can just do the "allotment cuts" and dismantle the government while shielding the legislators from blame.

We know this was the plan all along of course, even while snakes like Trabert tried to convince people otherwise.

The only solution is to vote out every state legislator who cooperated with Brownie and listened to Trabert, and elect a Democratic governor in 2018 to try and salvage the mess, assuming there is anything left to salvage.

Tony Peterson 1 year, 10 months ago

Even if all of them are voted out of office in November it will take at least a decade for the State to recover from the financial disaster they and Browncrack created.

Dorothy Hoyt-Reed 1 year, 10 months ago

But we need to start now, or it will take even longer.

David Reber 1 year, 10 months ago

"snakes like Trabert"

Hey, I take issue with that sort of disparaging language. Totally uncalled for. Snakes are fine animals, and you owe them an apology.

John Sickels 1 year, 10 months ago

Good point. I did not mean to disparage snakes.

How about ticks? Or disease-carrying mosquitoes?

Bob Forer 1 year, 10 months ago

Trabert could walk under the lowest snake in the grass while wearing a top hat and still have six inches of clearance.

Steve Jacob 1 year, 10 months ago

Pretty smart of Brownback. Instead of news stories every month about how collections are behind for the month, he just ripped off the band aid and got it over with.

Bob Reinsch 1 year, 10 months ago

Where's Dave Trabert to tell us that everything is going to fine, all we have to do is sell off the public school system to Pearson Education?

Tony Peterson 1 year, 10 months ago

He'll reappear later like psoriasis and claim it's just a rash rather than an auto-immune condition.

Phillip Chappuie 1 year, 10 months ago

I read where Ray Merrick said things aren't that bad. Isn't that like the Captain of the Titanic saying it is just a little hole. We need to get our legislature divested of all ALEC/AFP fake tea party water boys and get some reasoned moderate thinking folks running our State. Brownback is destined to go down in history as the worst administrator this State has ever had. Our schools suffer, Our infrastructure suffers. Our people suffer. And in the end Brownie will trot off to Washington to some think tank or lobby job as his just reward for selling us out. Kansas will be in his rear view mirror. Then the only Brownback we have left to worry about is the beer guzzling fool out in Linn county shootin up the neighbors property.

John Sickels 1 year, 10 months ago

the other thing is the school finance decision. Let's game this out.

A) The court will rule in favor of the school districts this summer and order a spending increase. B) Brownie and the legislature will say there is no money C) The court will say, that's your problem, increase funding even if it means rescind the tax cut D) Brownie and the leg will say no E) Trigger Constitutional crisis, as Brownie and leg push for overthrowing the court system this fall.

Brett McCabe 1 year, 10 months ago

You know, there was a time when I would have said that this was crazy talk. Now, it looks like it truly was the plan all along. If Kansas were a house in Waco, Sam Brownback would be David Koresh.

John Sickels 1 year, 10 months ago

The whole point of Brownback in the beginning was to shrink state government even if it was against the will of the voters. It is an ideological project and his narrow re-election in 2014 guaranteed it would go this far.

My guess is that he does not care if this costs the GOP statehouse seats in 2016 and the governorship in 2018. By that point, the damage will be done, government functions will be shrunk/privatized and much of the education system turned over to the private sector.

The point they miss is that government jobs (schools, hospitals, etc.) are the only things keeping much of rural Kansas afloat. Knock those out, the economy as a whole dies. But they either don't know or don't care and believe they can ram this through before the voters can stop them.

It is ideological insanity but that is more important to them than people's lives.

Kate Rogge 1 year, 10 months ago

I think emptying western Kansas to make unregulated room for corporate farms, dairies, and stockyards (and draining the Ogallala Aquifer) has always been the goal. The Kochs want to destroy Kansas government and its public services, and Governor Brownback, and his fellow creatures in the Kansas legislature, are delivering the Kansas Armageddon on schedule.

Bob Summers 1 year, 10 months ago

Just raise taxes on government employees to pay for the shortfall. They're the reason for the deficit.

Barb Gordon 1 year, 10 months ago

Yes. Raise taxes on the specific government employees responsible for the shortfall. That would be the legislature and the governor. I'm not sure they've got the cash lying around to pay the entire bill, but maybe they can ask their friends in Wichita for a hand.

Bob Summers 1 year, 10 months ago

By their own volition, the government employee declares they are desperately needed...! It is Brownback's fault there is not enough money! He has to plunder more! It's Koch's fault!

Plundering more from those that create to give to those that demand more is, well, morally deficient thinking in a economically sustainable society.

Government employees, a safe haven for people with the Liberal condition btw, demands are economically unsustainable.

David Reber 1 year, 10 months ago

Oh, how stale is the argument that government employees (or any government spending) is a drain on the economy. This makes zero sense.

Just where do folks think money goes once government employees (or agencies) get it? Let me tell you where: my modest income, like that of every other public employee, goes right through my bank account and back into the economy. I spend it. We spend it.

In 20+ years, I have not once been denied goods or services from any gas station, grocery store, guitar store, or gun shop....nowhere, never,....on the basis of "oh, you're a public employee? You're money is no good here, please leave." Nope. Never happens. They welcome my business.

Likewise, all that capital outlay money the legislature keeps fussing over in our K-12 schools - where do you anti-public-everything obtuse thinkers believe that money goes? Let me explain: it goes right into the income of PRIVATE businesses. Construction contractors, materials suppliers, and so forth. I have yet to see any of them turn down the chance to take the business of public schools on the inane idea that public money is no good. And it goes way beyond public schools. Ask any highway construction contractors how they feel about Brownback draining the bank of KDOT down to zero.

The entire public vs private money/jobs/entities/employees concept is a complete fabrication on the part of those greedy folks who simply don't want to pay their fair share to maintain this little thing called civilization. In order to see that, one must be smart enough to look past more than a single transaction in the cash flow.

Greg Cooper 1 year, 10 months ago

Perfect reply and analysis, David. Too bad the Bobs of the world refuse to see reality.

Bob Summers 1 year, 10 months ago

You perfectly explained why you are a drain on the economy.

Thanks

When will the riots start?

Greg Cooper 1 year, 10 months ago

Your reply to David shows, perfectly, why your constant denial of this issue is off base. You don't understand, and don't want to understand, the economic realities of this country. Wishing and hoping and denying are never going to make things better.

What part of David's comment leads you to the conclusion that he is a "drain on the economy"? His analysis perfectly delineates the give and take of money movement: someone wants something, someone else does it, and money changes hands based on the importance of the task done. No dollars are lost, the task is done, everything moves (somewhat) smoothly. Sounds to me as if the economy prospers under this system. The drain on the economy comes when an entity, let's call it a government, puts unrealistic expectations on the people who have grown to expect, and demand, a certain level of service from that entity and it suddenly makes decisions that make those services impossible to provide.

Now, you'll argue that the entity provides too much service with lots of waste. I would agree, to a point, but, remember, it is the people who actually pay for the services who create the demand. There is never a "proper" amount of waste in government, and never a lack of demand from the citizens. But that seems to me to be the system as it has evolved, and the citizens do not want to be the butt of a great big "experiment" that has never, and will never, work. The governmental entity has to have the mindset that it will provide services that the citizens demand, without injecting its own ideologies into the equation. As elected legislators, those governmental folks are to do what they're asked, within the realities of the taxes the citizens are willing to pay.

Paul Youk 1 year, 10 months ago

The sign of a true ideologue is when their ideas are obviously failing miserably but they stick with them as steadfastly as ever.

You contribution to this discussion is as useless in practice as the libertarian dogma that is ruining this state.

Ken Hunt 1 year, 10 months ago

Trickle down economics has never worked. Kansas has dug its own hole by reelecting the Governor and the Tea Bag nonsense that goes with it. What will it take for the state to wake up from this nightmare.

Phil Minkin 1 year, 10 months ago

It's all part of the Brownback(Koch Bros.. Tea Party)plan to eliminate government. It's done under the guise of lowering taxes, but it is reducing government to nothing.

Barb Gordon 1 year, 10 months ago

“We hear all the time of businesses that have moved here,” Sullivan said in defense of those tax cuts. “We believe they have positively affected the economy.”

They officially live on another planet where objective reality has no meaning. The Kansas economy is doing worse than the rest of the country. Even if there were a way to tell if there were businesses moving here rather than just restructuring to avoid taxes, those businesses aren't stimulating the economy. The experiment is not working. Go back to actual fiscal responsibility instead of this fairy dust Laffer curve nonsense.

Richard Heckler 1 year, 10 months ago

Never vote republican again if one values their rights and sound management of YOUR tax dollars

Richard Heckler 1 year, 10 months ago

How will the Brownback administration pay back KPERS?

Looting the Pension Funds All across America .... Wall Street is grabbing pension money meant for public workers

http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926

KPERS is probably not as safe as investors think? Not with ALEC politicians at the wheel.

Richard Heckler 1 year, 10 months ago

Where do these Brownback options come from? Outside sources I'd say because I don't believe GOP legislators have the ability to manipulate numbers to this extent aka beyond their capabilities.

The question in laymen terminology is "who is cooking the books"?

Does the FBI work for the taxpayers anymore?

Richard Heckler 1 year, 10 months ago

"Some 20 states have taken similar action with their tobacco settlement money, Shawn Sullivan said."( KC Star)

Those 20 states also have ALEC governments which coincidently are magcially going broke as well.

However none of these states were in financial difficulty until ALEC came along.

Michael Kort 1 year, 10 months ago

It is easy to fool the Re-Publican faithful, who believe that "do unto others" is somebody else's problem,...... and not their own !

Just look at brownie having another go at them,.......again !............but it all comes with a price of ones choosing........and greed will present its' own bill to them some day .

Set your calendar and vote them out on Election Day before they raise your sales taxes again while stiffing your fellow citizens and you .

Which one of them is giving back their salary ( that is not going to $ benefit, under the table, on the side, with more $$$$ ) for running your state government into the poor house and you along with it ???????

Which one of them will take on the states debt......personally ? Before moving to another state to escape payment ? They'll have their bag made of carpet and be gone !

Tracy Rogers 1 year, 10 months ago

Sam = Jim Jones

Kool aid is now being served.

Paul R Getto 1 year, 10 months ago

With his Muscular jesus handing out the cups.

Bob Summers 1 year, 10 months ago

Government Votaries have sucked the state, the country and now the world dry of economic freedom. Plundered its wealth.

Now they want more.

When will the rioting start?

Darrell Lea 1 year, 10 months ago

The rioting begins when people step away from their computer keyboards and devices and act out in real time. In other words, not anytime soon.

Mike Cohen 1 year, 10 months ago

Anyone who thinks the budget crisis was an unintended consequence of misguided public policy should remember the overall goal of a GOP dominated administration. Reducing the size of government. Looking at Kansas from their point of view, their policies have been a wild success, and no matter how indignant they get, or how much lip service they give, they will continue to follow the current formula.

Shrinking services, privatizing public agencies, reducing the state's role/responsibility in education are all part and parcel of making government small enough to fit into your pants.

Cause you know the most important issues revolve around who uses what public restroom.

Larry Sturm 1 year, 10 months ago

Reinstate the taxes entitlement to the rich.

William Weissbeck 1 year, 10 months ago

Time to do what the British nobility had to do when they came up short, sell the artwork and open up the manor house for tours and other paid events. Wedding receptions in the Rotunda. Sadly, the art work wouldn't put much of a dent in the debt. Even the John Brown mural.

Larry Sturm 1 year, 10 months ago

Brownback has too much power in bankrupting the state. I hope the that the crumbling highways destroy all of the Koch brothers trucks.As for our schools we won't have anybody smart enough to drive a truck.

Edward Branca 1 year, 10 months ago

As usual, Republicans want pay for their tax cuts by taking it out on the sick, old, young and poor. Please note, many of us who are on Medicaid are living with disabilities. We are people whom you greedy profit hungry capitalists refuse to hire.

Jim Phillips 1 year, 10 months ago

Reagan proved tax cuts work. Wait it tripled the debt. Still cost us a few hundred billion a year in interest.

Bush proved tax cuts worked. Wait it doubled the debt and is costing us a couple of hundred billion a year in interest.

Both had high unemployment, worst recessions since the great depression, stock market crashes and deficits. Reagan had the highest tax increases in peacetime history but it was too late.

Tax cuts don't work. Ask Bobby Jindahl.

David Smith 1 year, 10 months ago

Has ANYONE ever seen a state Legislature and Governor who are so totally disconnected from reality??? Sullivan says "we hear all the time of businesses that have moved here"... Oh REALLY??? IF that were the case, wouldn't the employment rate indicate all these people moving there? Wouldn't the tax revenue reflect the new business? Oh wait.. that's right, he doesn't tax businesses, so that wasn't correct.
NOBODY in their right mind would move to Kansas these days. No highway improvement since 2010 and not any (besides the two projects mentioned) for probably a decade since they have stolen all the highway funds. Higher Ed cuts galore which means tuition will increase dramatically because the schools have to make it up somewhere. Of course that doesn't hurt the Gov because it is mostly middle class and below who are struggling to pay tuition or the poor kids get loaded up with student loans. Brownbag and the Leg should be ashamed, but of course they aren't. Brownbag especially. He continues to act like his tax plan is a gold medal winner.

Harley Wasacasie 1 year, 10 months ago

It will be OK, Just give the Koch Bros., Their Rich Friend's & Big Businesses in Kansas more Tax Breaks. That's the GOP Way.

Harley Wasacasie 1 year, 10 months ago

We need all the States & the whole Country run the Koch/GOP Way. Just like Kansas, Wisconsin, & Louisiana. Go Koch/GOP, Make America Great Again, just like it was under W..

Michael Kort 1 year, 10 months ago

Well, the two headed God and their LLC flying monkeys are just feeding off the people of Ks. thru the devinity of their very own Ks Legislature and Saint brownie .

When it comes to money, "the two headed God is a jealous God" who needs everyone in THEIR state to make financial sacrifices for THEIR prerogative of being the richest God of all !

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