Topeka A House committee voted Monday morning to advance a plan for balancing the final months of the current fiscal year's budget without making any cuts to K-12 school funding or higher education.
The package, which is aimed at closing a projected $350 million funding shortfall, largely mirrors the one Gov. Sam Brownback proposed in January, with only a few amendments.
Although it avoids making major direct cuts to state programs, it does call for borrowing $317 million from state idle funds. It also would sweep more money out of the state highway fund and delay at least part of another quarterly payment of about $90 million into the state pension plan at the end of the fiscal year.
At the end of the last fiscal year, the state delayed a $92 million payment into the Kansas Public Employees Retirement System, with a stipulation that it eventually would be repaid, with 8 percent annual interest.
Brownback's plan called for writing off that payment, and for not making the fourth quarterly payment again this year or in each of the next two years, a plan that KPERS officials have said would add $1.3 billion to the fund's existing unfunded liability.
On Monday, though, the House Appropriations Committee pared back that part of Brownback's plan, but only after some heated debate.
Under the House committee's plan for the current fiscal year, the state would again delay that final quarterly payment. But the plan also says half of any ending balance the state has at the end of the year — estimated at about $100 million — would go back to KPERS.
In addition, the House panel added another provision that says if the full quarterly payment is made, an additional 10 percent of any ending balance after that would be deposited into a new "rainy day" fund that was established last year.
There was little opposition to the plan for borrowing the $317 million, although some on the panel said it made them uncomfortable.
Rep. Henry Helgerson, D-Wichita, noted that nothing like it had ever been done before in Kansas to pay for regular operating expenditures of the state. But even other Democrats on the committee said there was no better alternative.
"I think we find ourselves in a terrible dilemma," said Rep. Barbara Ballard, D-Lawrence, "From what I can hear from K-12, their biggest fear is if we cut that area, classes are going to get larger and they may have to lay off teachers."
But there was considerable opposition to delaying more payments to KPERS.
Rep. Troy Waymaster, R-Bunker Hill, who chairs the committee, offered the amendment to dedicate half of any ending balance to making at least a partial payment in the final quarter.
Helgerson, however, argued against any more delays into the KPERS fund, saying he doesn't believe the money will ever be paid back.
"I think a majority of subcommittees that met overwhelmingly said they want to stop borrowing money from KPERS. The majority of citizens in this state have said they want to stop borrowing from KPERS," Helgerson said. "We can balance out the budget by leaving KPERS whole, and we need to do it right now."
But Waymaster argued that the state's fiscal condition is too precarious, and that it would be fiscally dangerous to make a commitment to making the full KPERS payment.
"We are going to be borrowing funds for the rest of the year of 2017," he said. "There is no speculation what the consensus revenue estimates are going to be for the next few months. We hope they're going to be positive. There could be the occasion where it could be negative."
Before voting to advance the package to the full House, Rep. J.R. Claeys, R-Salina, attempted to add language authorizing demolition of a large portion of the Lansing Correctional Facility and authorizing the Department of Corrections to enter into a lease-purchase agreement for the construction of a new prison facility there.
That came as a surprise to many committee members because the subcommittee that deals with the Department of Corrections had only recently heard an informational briefing on that idea, and there had not yet been any formal hearings or detailed testimony on the idea.
Secretary of Corrections Joe Norwood said after the meeting that he pushed to have the project added onto the budget-balancing bill because he was anxious to move forward with the plan.
The Lansing prison was established in 1861, and many parts of the facility still reflect the design standards used at that time. Department of Corrections officials have said because of its outdated design, it takes more staff to operate the Lansing prison than any other correctional facility in the state, and that replacing it with a more modern facility would save the state millions of dollars a year in operating costs.
While many on the Appropriations Committee said they agreed with the need to modernize the Lansing prison, they would prefer to consider the plan later in the session, after they receive more detailed information and testimony on the proposal.