At a press conference Friday, Kansas Budget Director Shawn Sullivan (who is slated to appear in northeast Johnson County Tuesday to address the Northeast Johnson County Conservatives) announced that the state had downwardly revised its budget for the current fiscal year by $124 million as revenues continued to come in well short of projections.
The updated forecast suggests the state will take in $354 million less than had been expected between now and June 2017.
The latest dreary news on the state budget promoted a wave of speculation about how the legislature would make ends meet as it prepares to open its 2016 session in two months. We asked northeast Johnson County’s representatives to share their thoughts on the situation:
Rep. Barbara Bollier, Dist. 21
The budget crisis unfortunately is what I predicted at the time of the 2012 tax plan vote. Looking at the 2016 session it is very likely that the Governor will have to make more allotments to bring us to our constitutional balanced budget. And that is before we have a ruling on the equity portion of the Gannon lawsuit. At this point all that can be done is cuts, and I predict the “bank of KDOT” will be run dry by the Governor, along with further cuts from the Children’s Initiative Fund and the Kansas Bioscience Authority
It is difficult to predict where else the Governor will cut. What will lead us to a constitutional crisis will be a ruling on the adequacy portion of Gannon that potentially requires us to ante up on school funding. With more pressure on the budget, I would say that yes, there is more likelihood of a refusal by the legislature to put more money into K-12 education at the request of the court.
Rep. Stephanie Clayton, Dist. 19
Thus far, the current tax plan has not grown businesses, created jobs, or increased the population of our state. On the contrary, it has driven Kansas consumers over the border, decimated funding for transportation and economic development, and sent the signal nationwide that our state is in chaos. It is past time for true pro-business revenue reform that will create prosperity for all Kansans.
Rep. Jarrod Ousley, Dist. 24
It was estimated the elimination of business pass through income tax in 2012 would cost $800 million a year. I opposed the sales tax increase last year, because it shifted about $400 million of the lost tax revenue onto middle class families. But even with that tax increase, our State’s revenue is going to be short, and budget adjustments are evidence of this. The best approach to solving the shortfall would create an equitable and structurally sound tax system that doesn’t unfairly benefit a small percentage of people at everyday Kansans’ expense. But last session the Governor threatened to veto any bill that revisited the 2012 business tax cuts, and what the majority in the legislature decides to do may fall in line with the Governor’s decisions and pushes from powerful lobbying groups.
There are no good options for where to make future cuts or allotments. The budget has already drastically contracted, and I’m concerned K-12 could be subject to additional funding restrictions But none of our State programs, especially the ones supporting the most vulnerable Kansans, can afford to lose their scarce resources.
Finally, we may be facing a constitutional crises with or without additional revenue shortfalls. The Kansas Supreme Court heard oral arguments in the school funding Gannon v. Kansas case on Friday. The State failed to offer any evidence that the new block grants addressed unconstitutional inequities in school funding as required by previous decisions.
This administration and the majority in the legislature gambled with revenue that was traditionally put towards education, which has a proven return on investment, on tax cuts which have not generated the economic shot of adrenaline that was promised.
Rep. Melissa Rooker, Dist. 25
On Friday, the Consensus Revenue Estimating Group (CREG) released a budget forecast that once again lowers revenue expectations and leaves the state with a precarious budget outlook that leaves no margin for error (i.e. a legal judgment to pay more to K-12 education, revenues that continue to come in under the estimates, higher caseloads in health and human services, or a variety of other scenarios that constitute a “rainy day.”)
Immediately following this news, the Budget Director announced a series of budget cuts (euphemistically called “adjustments”) that will gut the Children’s Initiative Fund, sweep an additional $47.9 million from transportation, reduce pension contributions, reduce Medicaid payments and sweep all but $2 million from the Kansas Bioscience Authority at a critical time in the quest for Comprehensive status at the University of Kansas Hospital Cancer Center.
Kansas law requires us to balance the budget without borrowing, and maintain a 7.5% ending balance for unforeseen circumstances, yet we are doing neither. Bonding in the agencies that have that authority – specifically KDOT and KPERS – is being used to cover their costs while cash is swept from those funds to pay the bills. This is not free money and is no different than you or I opening a MasterCard to pay our Visa bill while we continue to charge things on our American Express card.
I have long argued for fiscally responsible monetary policies that include restoring balance to our tax code. In the report Friday, falling oil prices and a weak year for agriculture, as well as lower than expected sales taxes were blamed. The beauty of having balance in the system is that when one sector is weak, others can provide cover and predictability for the budget process. This includes keeping tax liability affordable for all Kansans by ensuring that all are paying a fair share into the system. Exempting some from any income tax is inherently unfair, and ultimately not sustainable.
As we grapple with the serious problems facing the state, please know that I will continue to fight for structural reform that solves our problems for the long-term to help us move from perpetual fiscal crisis to economic prosperity and secure the ability of our state agencies to provide the services that Kansans rely on to make this a desirable place to live, work and raise their families.
Sen. Kay Wolf, Dist. 7
The Governor will be responsible for making the budget balance. We should have fixed the pass-through loophole last year. This loophole allows for business owners of pass through entitities to shelter 100 percent of their “personal take home income.” This was not legislative intent however the Governor has threatened to veto any attempt to close the loophole. About $200 million per year and growing as more and more take advantage of the loophole
I believe the governor will stay away from K-12 unless the new projections are significantly missed. If education were to be affected, I think higher education would be cut before K-12.