Archive for Tuesday, March 14, 2017

Senate committee endorses bill to balance Kansas budget without major cuts

The Senate chamber of the Kansas Statehouse is pictured July 23, 2014 in Topeka.

The Senate chamber of the Kansas Statehouse is pictured July 23, 2014 in Topeka.

March 14, 2017

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— A Kansas Senate committee on Tuesday endorsed and sent to the full Senate a bill that would close a projected $281 million revenue shortfall in the current fiscal year's budget without making any major spending cuts.

But supporters of the bill say they expect other senators will offer amendments that would cut spending, largely because the bill assumes lawmakers will pass a major tax increase this year to make up for projected shortfalls in future years.

"There are some senators (whose) constituents want them to attempt to cut the operating budget before they jump right on to raising taxes, so I do expect an amendment to come to the Senate floor to cut operating expenses," said Senate Majority Leader Jim Denning, R-Overland Park, who authored much of the bill.

The so-called "rescission" bill would close this year's funding shortfall, mainly by borrowing money from an idle funds investment account and delaying part of a quarterly payment into the Kansas Public Employees Retirement System.

However, unlike a similar bill passed by the House that calls for borrowing $317 million in invested idle funds, Denning's plan would split that borrowing over two years, thus reducing the amount the state would need to repay next year.

For the current year, Denning's plan calls for borrowing only enough to leave the state with a $50 million ending balance when the fiscal year ends June 30. Budget officials estimate that would require something between $100 million and $135 million, depending how tax revenues perform in the final four months of the fiscal year.

Those loans would be repaid over the course of six years.

His plan also calls for delaying payment of $150 million into the KPERS fund, but then repaying that, with interest, over 20 years so the state would stay on schedule in its plan to pay down the troubled pension system's long-term unfunded liability.

Republican leaders in the Senate, including Denning, had proposed a rescission bill earlier in the session that would have cut $128 million in K-12 education spending and $23 million from higher education. But leaders were forced to pull that bill from the calendar after support for it evaporated amid a storm of protests from education groups.

Since then, the Senate has been stalled in efforts to fix the hole in this year's budget, something Gov. Sam Brownback, in his State of the State address, had urged them to complete before the end of January.

According to an analysis by the Legislature's nonpartisan research office, if the Senate rescission bill passes, the state would need to raise about $303 million in additional revenue next fiscal year, and $460 million in the fiscal year after that, in order to avoid spending cuts in those years.

Those figures do not include any additional money to comply with the Kansas Supreme Court's recent order declaring K-12 school funding inadequate, or any money to restore the 4 percent cut in Medicaid reimbursement rates that Brownback ordered last year as part of a package of allotment cuts needed to balance the 2016 budget.

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