Sen. Vicki Schmidt, left, R-Topeka, and other spectators watching the conference committee budget negotiations keep tabs on green spreadsheets as the House and Senate take positions on a laundry list of spending items on which the two chambers differ.

Topeka ? House and Senate budget negotiators were meeting late into the night Friday, struggling to reach agreement on a two-year spending plan that needs to pass before the start of the new fiscal year on July 1.

Over the course of two days, the six-member conference committee resolved dozens of minor differences between the chambers’ two budget bills.

But late Friday, they were still struggling to find common ground on issues such as state employee pay raises, and whether to use any excess money the state might see in the future to start a rainy day fund or pay back money owed to the state pension system.

photo by: Peter Hancock

Sens. Laura Kelly, right, Carolyn McGinn and Rick Billinger engage in late night bargaining with their House counterparts Friday, June 9, 2017 as the two sides try to reach agreement on a two-year spending plan.

Both chambers appeared willing to approve some sort of pay raise for state employees, many of whom haven’t seen a cost of living increase in roughly a decade, since before the start of the Great Recession. But they were split over how much to give, and which employees should qualify.

The Senate’s original plan was to offer a 2 percent, across-the-board increase for all employees, but the House wanted to limit raises to correctional officers and nonjudicial court employees.

By late Friday, they had generally agreed to divide the workforce into three groups: those who have worked for the state less than five years; those who have worked more than five years and have not seen any raise during that time; and those who have gotten raises, either through promotions or agreeing to switch from classified status to unclassified.

Under a Senate offer, newer employees would get a 2.5 percent raise; those who’ve gone five years or more with no increase would get 5 percent. Those who have received adjustments recently would not qualify for one under the two-year plan.

The House wanted to lower the top level to 3.5 percent and wanted to limit raises in the judicial branch only to nonjudge employees, even though under the Kansas Constitution, the Supreme Court has independent authority to allocate funds within the judicial branch.

The two sides appeared to be nearing agreement on that issue around 11 p.m., but the biggest sticking point concerned whether to establish a “rainy day fund” for the state.

The House budget bill included a formula for directing money into such a fund, which could only be tapped under limited circumstances. Under that plan, in any year when actual income tax receipts exceed the rolling average of the previous three years, half of the excess would go into a “budget stabilization fund,” and the other half would be directed to pay down the unfunded liability in the Kansas Public Employees Retirement System.

Rep. Troy Waymaster, R-Bunker Hill, argued that the state is just now digging out of a years-long period of shortfalls. After passing a $1.2 billion tax increase by overriding a governor’s veto, he said House leaders felt strongly about setting money aside in the event of another downturn.

Senate negotiators, however, were refusing to go along with that.

Sen. Rick Billinger, R-Goodland, argued that the state made its way through the last two fiscal years by delaying a payment into KPERS and borrowing money out of an idle funds investment account. He said the House plan amounted to taking out a loan to put into a savings account when what the state ought to be doing is paying down its debt.

The Senate’s plan calls for repaying that delayed 2016 KPERS payment. But Waymaster, however, said there are many in the Republican House caucus who want to write that off and focus on building up the state’s balances.

Meanwhile, Sen. Laura Kelly, D-Topeka, the ranking Democrat on the Senate Ways and Means Committee, argued that state agencies have been “decimated” during the period of revenue shortfalls, and she thought it was more important to put resources into state hospitals and child welfare services, which she argued do not currently have the resources they need to do their jobs.

Lawmakers had hoped to wrap up negotiations by midday Friday so the chambers could vote on a final plan Saturday morning. It takes approximately 12 hours for legislative staff to put a budget bill into proper format and have it printed.

But as of 11:30 p.m., the two sides were still negotiating.