Kansas House budget plan still hits KU, shields KU Med

An aerial photo of Kansas University’s campus as it looks in August 2015.

? The Kansas House on Wednesday gave first-round approval to a $6.3 billion budget bill that contains punitive limits on how Kansas University can spend tuition and fee funds next year, limits KU says would severely hamper its ability to manage its programs.

That language was inserted into the bill by the House Appropriations Committee in reaction to KU’s decision to issue $327 million in bonds to finance its Central District development project, using a Wisconsin public finance agency so it could avoid having to get legislative approval.

Rep. Marc Rhoades, R-Newton, who authored that restriction, said Wednesday that he supported the amendment exempting the medical school in Kansas City, Kan.

“Certainly I don’t think the intention was to harm the hospital,” he said.

Reps. John Wilson and Barbara Ballard, both Lawrence Democrats, said they supported the change, although they opposed the underlying language that leaves the restrictions in place for the Lawrence campus.

That language says that any Regents university that issued bonds after July 1, 2015, using an out-of-state development authority will have all spending from special revenue funds capped at the amount they estimated when they submitted their budget proposals to the governor. Those funds include money universities receive in tuition, campus fees, student housing and parking fees, just to name a few.

Typically, the Legislature puts no limit on spending from those funds because the actual amount received the following year can vary greatly from what the universities estimated.

“I wish somebody would come down and offer an amendment … to just take the Regents institutions off altogether,” Ballard said.

But Ballard did not offer such an amendment herself. And in fact, KU officials said they did not ask any legislators to do so.

“We did not, but it is a long process. Today we took care of the medical center,” KU Vice Chancellor Tim Caboni said in an email.

Caboni and other lawmakers said KU and the Board of Regents are trying instead to take a less confrontational stance in responding to the Legislature.

“While not ideal, we appreciate the House removing the University of Kansas Medical Center from the amendment,” Caboni said. “We will continue to answer legislator questions about the Central District project.”

That was a very different tone than the university struck immediately after the Appropriations Committee added the language. At that time, Caboni issued a statement calling the action a “targeted attack” on KU, suggesting that it “sends a signal nationally that Kansas is not a state that’s receptive to business and development.”

Some lawmakers, however, responded harshly to that statement, and the Senate budget committee then added language to its own bill going even further, prohibiting KU from using any state funds or special revenue funds to make lease payments on the Central District project.

“If you read some of the comments from Mr. Caboni, they are flippant and unfortunate, and I’m shocked at some of the comments (in the news media) that he said,” Sen. Michael O’Donnell, R-Wichita, said during a committee hearing Tuesday.

Wilson said there was general agreement the KU restrictions should not be turned into an issue on the House floor.

“My sense is, there would have been not only push-back, but consequences for that which would have been worse for KU,” he said.

“I’ve been surprised at just how much anger there is at KU this session,” he said. “Certainly there could have been more communication on all parts, but I don’t like how petty it’s gotten in the Legislature and how punitive they’re becoming around what was a creative solution to a problem that the university took.”

Rep. Ron Ryckman Jr., R-Olathe, who chairs the Appriations Committee, said he has been in talks with Kansas Board of Regents officials about trying to resolve the controversy over the KU bonds.

“We talked a little (Wednesday) morning and it was a very healthy dialogue of further understanding the situation and moving to a more transparent and open relationship,” he said.

Rhoades, however, said he sees no reason to remove the spending restrictions on KU.

“Why would we need to take that off?” he asked. “We’re basically saying they can spend up to what they budgeted in their own unlimited funds. They’ve already budgeted that number, so the question would be, why would they need to spend more than that budgeted number.”

Other provisions

The House bill, along with a Senate bill that will be debated Thursday, are really just the first steps in a long budgeting process in which both chambers stake out their initial positions. And several details are certain to change in April, after lawmakers receive new, updated revenue forecasts, and lawmakers sit down to craft a final, “omnibus” spending bill.

Both bills call for making changes for the remaining months of the current fiscal year, which ends June 30, and to the previously-passed budget for the next fiscal year, which begins July 1.

The House bill calls for general fund spending of about $6.3 billion in both years, but it makes a number of other changes to the both years’ budgets.

Among them is funding for a 2.5 percent pay raise for uniformed correctional officers in the state prison system. It also provides $2 million in additional funding for Osawatomie State Hospital to help relieve staffing shortages, and $1 million in additional funding for Larned State Hospital.

Among them is a $25 million transfer out of the state highway fund into the general fund in order to make up for revenue shortfalls next year.

It also gives Gov. Sam Brownback authority to delay a quarterly payment at the end of this year into the Kansas Public Employees Pension System, if revenue projections show the state would otherwise end the fiscal year in the hole. But that payment would have to be made by August 2016, with interest, and the KPERS fund would be shielded from any other mid-year budget cuts during the 2017 fiscal year.

Another controversial change concerns Parents as Teachers, a program run by the Department of Education that gives information and training to new parents to help them with parenting skills and to prepare their children for school.

It’s currently funded through the Children’s Initiative Fund, which comes from tobacco settlement money, and has been free to any parent who applies for it.

Brownback had initially proposed shifting all of the Children’s Initiative Fund into the state general fund, and putting income limits on programs like Parents as Teachers so that people above certain income levels would have to pay based on a sliding scale.

The bill, however, leaves the Children’s Initiative Fund intact. But it also shifts $7.2 million in federal welfare funds into the children’s fund, with requirements that any programs funded with that money would have to subject to income limits, or “means testing.”

Democrats offered an amendment to shield Parents as Teachers from any means testing, but Republicans rejected that amendment.

According to current revenue estimates, the House budget in its present form would leave the state with just $31.8 million this year and $111.6 million at the end of the next fiscal year.