Lawmakers agree it may be possible to ride out fiscal year with no further cuts

photo by: Nick Krug

Kansas Statehouse in Topeka, February 2014.

? Kansas lawmakers from both parties say it may be possible to ride out the final weeks of the fiscal year without making further spending cuts, despite a $75 million revenue shortfall for the month of May.

“I’m not the governor, and I don’t know what the budget director is planning on doing, but I know there are a couple ways to handle that,” said Rep. Sharon Schwartz, R-Washington, who is vice chair of the House Appropriations Committee.

According to the Legislature’s nonpartisan Research Department, the May revenue shortfall creates roughly a $45 million budget hole that must be filled either with spending cuts or other revenues before the end of the fiscal year June 30.

Gov. Sam Brownback’s office said late last week that it does not anticipate ordering any more spending cuts. Instead, he and Budget Director Shawn Sullivan are looking to fill the gap by using fee fund balances held by various cabinet agencies where there is some discretion over how those funds are used.

But the governor’s spokeswoman Eileen Hawley said Friday that no final decision has been made and that the administration will continue to monitor revenues as they come in during June before making a decision.

“I’m sure that you can,” said Sen. Laura Kelly of, Topeka, the ranking Democrat on the Senate Ways and Means Committee. “There are agencies that, for a variety of reasons, carry some pretty substantial balances. Some of those have been swept already, but I’m sure that if you cobbled them all together, you could come up with $45 million.”

Several agencies in state government operate entirely off the fees they charge for their services. But many of them, such as the Board of Cosmetology and the Office of Securities Commissioner, are fairly small and do not qualify as cabinet agencies.

But there are cabinet agencies that have substantial fee funds, including the Department of Health and Environment, which charges fees for conducting health inspections and issuing different kinds of licenses and permits, and the Department of Wildlife, Parks and Tourism, which generates fees from selling hunting and fishing licenses, as well as renting camp sites at state parks.

Schwartz noted that in the early 2000s, during a recession brought on by the collapse of technology industry stocks, followed by the terrorist attacks of 9/11, those fee funds were swept a number of times to make up for revenue shortfalls.

She said she also doesn’t think the governor has any choice.

“I don’t think there’s the desire out there right now to do anything with the tax policy,” she said. “There obviously wasn’t any during the session, and that can’t make a difference immediately anyway. So what we’re looking at is something to be able to get us through the rest of (fiscal year) 2016.”

Kelly said it was true that other administrations have used fee funds as a source of emergency cash during difficult times, although she said that usually made it harder for agencies to manage their cash flow throughout the year.

But she also said it does nothing to solve the state’s long-term budget problems.

“But I’m not surprised that this administration is doing this in an election year,” she said. “They don’t want to put their folks in a position of having to explain those cuts when there are elections in August.”