State Budget director Shawn Sullivan presents the governor’s budget to a joint meeting of representatives and senators Wednesday morning Jan. 13, 2016 at the statehouse. (Thad Allton /The Topeka Capital-Journal via AP)

Topeka ? Gov. Sam Brownback’s administration Wednesday outlined his plan for balancing the state’s budget and filling a projected $175 million revenue shortfall in the next fiscal year.

The governor’s budget plan would make no substantive changes to funding higher education, including funding for Kansas University and the KU Medical Center. And it includes only a minor cut in K-12 education, due mainly to higher-than-expected property tax collections and lower-than-expected costs for contributing to school employee pension plans

But it does include a number of other spending cuts, fund transfers and accounting changes, including a proposal to liquidate the portfolio of the Kansas Bioscience Authority, to make up for shortfalls in sales, income and severance taxes that have threatened to put the general fund in red ink.

“Because it’s the second year of a two-year budget, it’s really trying to find ways to plug holes,” said Sen. Marci Francisco, D-Lawrence, who serves on the Senate budget committee. “We can’t do it through our ending balance, so we are really grasping at straws to find money that we clearly need. And we are not addressing many of the shortfalls that we are hearing exist.”

Sen. Marci Francisco, front, and Rep. Barbara Ballard, both Lawrence Democrats, listen as Budget Director Shawn Sullivan outlines Gov. Sam Brownback's budget proposal for the fiscal year that starts July 1.

For example, she said, the governor’s budget does not include funding to hire more troopers in the Kansas Highway Patrol, which currently has at least 80 vacant trooper positions. Nor does it include funding for pay raises at the Department of Corrections, which has suffered from staff shortages and high turnover rates among guards in the state’s prisons.

Some of the key changes Brownback is proposing from the Fiscal Year 2017 budget that lawmakers approved last year include:

• Shifting $44.1 million in tobacco settlement revenues out of the Children’s Initiative Fund directly into the State General Fund, then using federal welfare money known as Temporary Assistance to Needy Families, or TANF, to fund some of the programs previously paid out of the children’s fund.

The administration says that will not result in any funding changes for programs and services that are expecting to receive Children’s Initiative Fund money.

• Transferring another $25 million out of the state highway fund into the general fund.

• Privatizing the Kansas Bioscience Authority by liquidating its stock assets and depositing that money, estimated at $25 million, into the general fund.

• Reducing funding for the State Children’s Health Insurance Program, or SCHIP, by $25.5 million, replacing that with enhanced federal matching funds for that program.

• And reducing spending on mental health drugs in the Medicaid program by $10.6 million with a “step therapy” program that requires patients to try lower-cost generic drugs first, before they’re allowed to use name-brand drugs.

Higher education

KU Vice Chancellor Tim Caboni said that, given the state’s financial situation, the university has no complaints about the governor’s proposal.

“We’re pleased with where the session has started,” he said, noting that if the governor’s budget passes, it will be the third consecutive year of “stable” funding for the university.

But he also noted the governor did not recommend one item the university had sought: pay raises for Medical Center faculty, which KU says are needed to recruit and retain top researchers and teachers.

“It’s the beginning of a long session,” Caboni said. “We’re going to continue to talk about the needs for raises at the Medical Center. But overall, we’re starting at a pretty good place.”

K-12 funding

Meanwhile, Lawrence school district officials said they are still not pleased with Brownback’s proposal for K-12 funding because, even though there are no substantive cuts in block grant funding, the fact that Lawrence’s enrollment continues to grow means the governor’s plan amounts to a cut, at least on a per-pupil basis.

Furthermore, Lawrence was among the districts that saw substantial cuts last year when the Legislature abolished the old per-pupil funding formula, replacing it for two years with block grants, because in that change, the state no longer counts virtual school students when calculating aid for the district’s local option budget.

“Our very real experience in USD 497 is that block grants have not increased our funding,” Lawrence school board member Shannon Kimball posted on her Twitter account. She said Lawrence’s enrollment grew by 249 students this year, but it received no increase in funding as a result.

The governor’s budget does, however, include $327,500 to fund an award program for teachers who earn National Board Certification.

Kansas Bioscience Authority

Rep. Tom Sloan, R-Lawrence, said he was concerned about privatizing the Kansas Bioscience Authority, an agency established in 2004 to act as both a venture capital fund and as a kind of business incubator to help startup bioscience companies, primarily in the Kansas City area, get off the ground.

“The Bioscience Authority was created to drive the economic engine of Kansas,” he said. “And on the whole it’s done a very good job. There were glitches related to some inadequate management, but those were overcome. I really hate to see the authority not be part of the state of Kansas’ move to the future.”

According to KBA’s most recent audited financial statement, its cash and securities assets were valued at $32.4 million.

Other proposals

Brownback’s budget plan was unveiled the morning after his State of the State address, in which he unveiled a number of other non-budget initiatives.

But one of those involves a measure that could have a profound impact on local governments: moving up the effective date, to July 1 this year, of a new property tax lid that will prevent cities and counties from holding public votes before they can increase property tax revenues by more than the rate of inflation.

Both the city of Lawrence and Douglas County oppose such a move, which is being pushed by the Kansas Association of Realtors, and they listed blocking such an attempt as one of their top priorities for the 2016 session.

Douglas County administrator Craig Weinaug said that property tax lid could be especially harmful to the county.

“It certainly presents challenges for us, particularly if the state acts on the proposal to put more of the state’s prisoners in county jails,” he said. “The state has a history of under-compensating counties for things they mandate that we do. Typically they pay only a fraction of the cost it takes to keep prisoners.”

Brownback also called for passage of a constitutional amendment to change the way Kansas Supreme Court justices are selected.

Rep. Boog Highberger, D-Lawrence, who serves on the House Judiciary Committee, said he opposes that idea.

“I think our system now works really well, and we’re recognized around the country for having excellent judges,” he said.

Highberger also questioned whether Brownback can muster the two-thirds majority needed in both chambers to pass a resolution that would put a constitutional amendment on a statewide ballot.

“They obviously didn’t have the two-thirds (majority) on the changes they ran last time,” he said, referring to proposals in the 2015 session that never advanced out of committee. “It may be closer this time, but I don’t think so.”