Senate panel advances budget bill with $874 million deficit; pay raise and additional KU funding included

Kansas Statehouse in Topeka, February 2014.

? The Senate Ways and Means Committee on Thursday endorsed a two-year budget bill that would make full payments into the state pension system as scheduled, provide a 2-percent across-the-board pay raise for state employees and partially restore some of the cuts that Gov. Sam Brownback ordered last year for the University of Kansas and Kansas State University.

It would also require at least $874 million in new tax revenue over the next two years, something that lawmakers so far have not been able to get past Brownback’s veto pen. But in order to leave the state with even a minimal cushion at the end of each of the two years, the tax increase would have to be a little more than $1 billion. The proposed budget does not contemplate what form those tax increases would take.

“I just wanted you to see that if other things happen, this is what the balances will look like,” said committee chairwoman Sen. Carolyn McGinn, R-Sedgwick, referring to the assumed passage of a tax bill. “If those things do not happen, if the bill passes the Senate floor, we will be back here (later in the session) cutting the budget.”

The bill passed out of the committee by a vote of 11-2. Sens. Larry Alley of Winfield and Jim Denning of Overland Park, both Republicans, voted against advancing the bill. It now goes to the full Senate which is expected to debate the bill next week.

When Brownback signed the current year’s budget into law at the end of the 2016 session, he ordered $97 million in so-called “allotment” cuts in order to make it balance with revenue estimates in place at that time. Those cuts included a 4-percent cut in state aid to the six Regents universities as well as the state’s community colleges and technical schools.

But the cuts were not distributed evenly to all schools. KU and K-State took proportionately larger cuts than the smaller universities, under the assumption that they receive more money than the other schools through sources such as student tuition and federal research grants.

In his own budget proposal, Brownback proposed carrying those cuts forward for the next two years. But the Senate bill would restore some of the money cut last year from KU and K-State to bring the size of their cuts down to 4 percent for the fiscal year beginning July 1, and 3 percent for the next fiscal year after that.

For the KU Lawrence campus, that amounts to $1.9 million above Brownback’s recommendation in the first year, and $2.9 million the second year.

For K-State’s Manhattan campus, the bill would add $1.1 million the first year, and $2.1 million the second year.

The Senate bill does, however, delete $800,000 in state building fund money that Brownback had proposed for an initial feasibility study of establishing a dental school at the KU Medical Center in Kansas City, Kan.

Perhaps the most costly change the Senate bill makes to the governor’s plan deals with the Kansas Public Employees Retirement System.

One of the other cuts Brownback ordered last year came in April when he delayed a $92.6 million payment into the Kansas Public Employees Retirement System. That payment was originally intended to be repaid, with interest, but as the state’s financial condition worsened over the year, Brownback proposed not repaying that money, and continuing to cut one quarterly payment into the system each of the next two years.

The Senate bill rejects that proposal entirely and adds $115 million for next year to make last year’s delayed payment. In addition, it calls for making full payments at the legally-required levels each of the next two years.

The bill also rejects Brownback’s proposal to sell off the state’s interest in future tobacco settlement money. Instead, it calls for continuing to put that money into a special Children’s Initiatives Fund, which funds early childhood education and children’s health programs, rejecting Brownback’s other proposal to pay for those programs in future years through the state general fund.