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Kansas state budget

Kansas
Annual
Fiscal Year 2012
Signed into law May 28, 2011
GF Revenue


Kansas lawmakers in the Kansas state legislature approved a $13.41 billion FY2013 state budget on May 20, 2012.[1]

Kansas has a total state debt of approximately $28,538,211,000, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the budget gap. [2]

See also: The Kansas State Budget on State Budget Solutions
2011 State spending & deficit in billions[3]
Total spending Gen government Human services Education Protection Transport Agriculture Debt
$14.2 $.825 $4.9 $3.6 $.68 $1 $.18 $.51
2011 Local spending & deficit in billions[3]
Total spending Pension Health care Education Welfare Protection Transport Deficit
$15.6 $0.1 $1.3 $5.6 $0.2 $1.1 $.9 $15.4

[edit] Fiscal Year 2013 State Budget

Kansas lawmakers in the Kansas state legislature approved a $13.41 billion FY2013 state budget on May 20, 2012.[4] The budget increases state general fund spending, primarily state taxpayer money, by approximately 0.7% over FY2012. It is written to include a 7.5 percent ending balance, which could possibly be tapped by lawmakers should the new tax cut fail to promote sufficient growth.[5]

Highlights of the budget include:

  • income tax cuts;[5]
  • a $40 million increase in funding for K-12 education, approximately $60 per student;[5]

The tax bill that will cost around $3.7 billion over five years and is forecast to put the state in a $242 million financial hole as early as FY2014, with the shortfall increasing to possible $2.5 billion in FY2018.[4]

Governor's Proposed Budget

On Jan. 12, 2012, Gov. Sam Brownback proposed the FY2013 state budget, which can be found here. Under the governor's proposal, the state would spend just under $6.1 billion from the general fu. It is $39 million, or a little less than 1 percent, than spending in the FY2012 state budget. The budget would leave cash reserves of $465 million at the end of the fiscal year.[6] Overall state spending, including spending with financed with federal funds, would be $14.1 billion, which is approximately 1.7% more than the all-funds total of $13.9 billion in FY2012.[6]

The governor also proposed redesigning the state's income tax system by cutting individual income tax rates but eliminating tax credits and deductions.[6] The governor's plan lowers the individual income tax rate from 6.45% to 4.9%.[7] Brownback would cut the bottom tax bracket to 3 percent and eliminate individual state tax on most small-business income.[8] The cuts would be offset by a slight increase in the sales tax rate and a broadening of the tax base.[9]

The governor also endorsed a proposal to use revenues from state-owned casinos to bolster the long-term financial health of the Kansas Public Employees Retirement System. The proposal has passed the House in a larger bill aimed at shoring up KPERS.[10]

The governor's budget report can be found here.

Legislative Proposed Budget

It appeared a deal had been reached on March 30, 2012, which would have cut overall spending by 4.2 percent, or about $620 million, and leave the state with cash reserves of $523 million at the end of June 2013, but it did not last. House Republican leaders cancelled a vote on the deal and reopened budget discussions after the legislation did not match the agreement they had reached, especially in regard to K-12 school funding. Lawmakers then adjourned for their spring break, meaning that the budget will be unresolved until lawmakers return April 25 to conclude the year. [11]

When the conference committees' failure to reach a budget deal in March, lawmakers did not approve a $1.4 million supplemental appropriation for the judicial branch. As a result, Kansas Supreme Court Chief Justice Lawton Nuss said that state courts will have to close for five days, with 1,500 workers being furloughed on those days.[12]

The Senate passed a $14.4 billion budget by a vote of 34-5.[13] Highlights of the Senate budget include:

  • adding $50 million to increase base state aid for schools,
  • adding $27 million to equalize school aid payments among poorer districts,
  • adding $5 million to reduce waiting lists for services for residents with physical and developmental disabilities,
  • adding $45 million a year for four budget years for cities and counties to reduce property taxes.[13]

The House approved the proposed $14.1 billion state budget on March 19, 2012.[14] It cuts spending by $600 million, or 4 percent, over FY2013. The budget is very similar to that proposed by the governor, although lawmakers added in $25 million for education and $5 million for community mental health centers.[15] That $25 million would come from a Kansas Department of Transportation highway program to help K-12 public schools deal with higher-than-expected student enrollment.[14] The House budget included provisions barring Insurance Commissioner Sandy Praeger from spending about $1.2 million in federal grant dollars her agency received to help plan for a health insurance exchange as required to be established by 2014 by the Affordable Care Act.[16]

The State Senate approved a $14 billion FY2013 state budget bill on March 21, 2012. It reduces state spending by 4 percent, or $572 million.[17] The Senate's budget provided $8.5 million for the fourth year of a scheduled five-year program to improve salaries of state employees with wages far below similar jobs in the private sector, whereas the House's budget did not include funding for that salary increase.[17]

Rainy Day Fund

Members of the Senate proposed a constitutional amendment that would create a rainy day fund. The state would be required to deposit up to 1 percent of its budget into the account when the state has a year-end balance of 3 percent or more. The state would no longer have to make deposits when the account reaches 15 percent of the previous year’s tax revenue. When necessary, the state would be allow to draw only enough money to equal the year’s projected budget shortfall. [18]

[edit] Fiscal Year 2012 State Budget

The governor signed the $13.8 billion FY2012 budget into law on May 28, 2011.[19] The budget closes a shortfall of around $500 million by reducing overall spending 6.1 percent, with public schools aid being reduced by 5.6 percent.[20]

The budget does not raise taxes and, as written, leaves a surplus of $50 million.[21]

The state offered buyouts to 4,000 employees of up to five years of their current health coverage or a one-time lump sum $6,500 cash payment to entice them to voluntarily take early or full retirement. The retirements would ease pressure on the state budget.[22]

Courts

On May 20, 2012 the Legislature approved $1.1 million in supplemental funding to keep courts open for the remaining 40 days until FY2013 begins on July 1.[23]

Medicaid

Gov. Brownback said that he would return $31.5 million in federal funds that were part of a grant to help the state integrate its health insurance databases and policy networks into a user-friendly system.[24]

Public Employee Unions

The House of Representatives passed a bill on Feb. 24, 2011, that would prohibit employee payroll deductions for union dues and political action committees.[25]

State Income Tax

A bill that would have phased income taxes down over time and reduced corporate tax rates was introduced but not passed in the legislative session. Budget Director Steve Anderson said that there would be a renewed effort to reduce or get rid of state incomes taxes for FY2013.[26]

[edit] Governor's Proposed Budget

To resolve that deficit, Governor Sam Brownback on his first day in office proposed an immediate spending freeze and eliminating eight state agencies, though he did not specify which agencies.[27] He also said the state can eliminate $750 million from its FY2012 budget while actually increasing the amount the state spends on K-12 education.[27] Gov. Brownback also plans to eliminate 2,000 state jobs, all of which were unfilled at the time of the announcement.[27]

In July 2010, Gov. Mark Parkinson’s budget staff expected revenues from a sales tax increase to keep programs intact for the coming fiscal year and instructed state agencies to prepare status quo spending proposals for FY2012, which begins July 1, 2011. Legislators, however, did not express similar confidence and warned that a new round of cuts could be required. “They probably need to have a Plan B in place,” said Jay Emler, chair of the Senate Ways and Means Committee.[28]

The Budget Division guidelines for FY2012 presume that revenues from the sales tax increase from 5.3% to 6.3% will offset the loss of up to $438 million in one-time federal stimulus funds. Although agencies are able to propose new spending initiatives, the Budget Division also asked agencies to propose ways to trim their spending of state tax dollars by up to 5 percent, if necessary.[28]

Governor-elect Sam Brownback said his budget priorities in order are Medicaid, K-12 education, higher education and public safety.[29] His priority areas account for 80% of the state budget, meaning the other 20% is subject to more aggressive cuts until state finances improve.[29] Brownback said repealing the 1-cent sales tax that went into effect July 1 is not an option given that size of the shortfall.[29]

Brownback said he hopes to give K-12 school districts more flexibility to use their reserve funds.[30]

[edit] Legislative Budget

The legislature approved a $13.8 billion budget, with the Senate approving it 28-11 on May 12, 2011, and the House approving it with a 69-55 vote.on May 13, 2011. Relying on cuts and not increasing taxes, the budget closed a $500 million revenue shortfall. The bill cuts base state aid to schools by $232 per student, or 6 percent,[31] reducing the amount from $4,012 in 2011 to $3,780 in 2012.[32] That is lowest level in more than a decade. The budget would end the final two years of a pay plan to bring up the wages of state employees who are paid way below market value. [31] The plan raises the state sales tax rate from 5.3 percent to 6.3 percent in 2010 to shore up revenues. The approved budget plan calls for cutting government spending by $881 million, or nearly 6 percent.[32]

Kansas Senate Ways and Means Committee members endorsed a proposed 2012 budget on March 17, 2011, and it was passed by the entire Senate on March 29, 2011. The Senate budget reduces aid to the state's 289 school districts by $226 per student — slightly less than the $232 per-student cut proposed in the House budget bill.[33] It differs significantly from the governor's proposal and focuses on cuts, reducing state spending by $535 million so that the state will end the year $7.5 million in the black.

In contrast, the budget drafted by the Kansas House budget follows many of the governor's proposals, but shifts $35 million in funding cuts into 2011 to end with that balance instead of zero.[34]

Both versions call for spending approximately $14 billion from all revenue sources, including $6 billion from state taxes and fees.[35]

[edit] Budget transparency

KanView is the name of Kansas's publicly available online spending database. As a result of the Kansas Legislative House Committee on Government Efficiency and Technology, the legislature and governor passed legislation in 2007 and 2008 that mandates greater financial transparency for Kansas state government.[36]

See also: Evaluation of Kansas state website

Art. 2, Sec. 15 of the state constitution provides that "No bill shall be passed on the day that it is introduced; dispensable in case of emergency as declared by 2/3 of members present in the House where it is pending"

See also: Constitutional provisions regarding reading of bills

[edit] Government tools

KanView provides a searchable database of state financial information, organized by expenditures and revenues for the five categories of Agency, Fund, Program, Object and Vendor. Annual expenditures and revenues are updated soon after the close of Kansas's fiscal year, which runs from July 1 to June 30.[37]

The following table is helpful in evaluating the level of transparency provided by KanView:

Criteria for evaluating spending databases
State DatabaseSearchabilityGrantsContractsLine Item ExpendituresDept/Agency BudgetsPublic Employee Salary
KanViewY
600px-Yes check.png
Y
600px-Yes check.png
N
600px-Red x.png
Y
600px-Yes check.png
Y
600px-Yes check.png
P
Partial.png
Kansas Department of Administration, PurchasingY
600px-Yes check.png
N
600px-Red x.png
Y
600px-Yes check.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png
  • Grants are viewable as an expenditure category.
  • The site does not provide individual employee salaries, only pay rates by position and agency.
  • Line item expenditures are available by agency.[38]
  • KanView links to the state's Budget Division, which provides annual budgets that include agency expenditures.[39]
  • The Department of Administration's Purchasing site provides information on all state contracts, including expired contracts.[40]

[edit] Limitations and Suggestions

KanView was supposed to contain information on salaries and wages, including compensation paid to individual state employees. This requirement is clearly specified in the language of the Kansas Taxpayer Transparency law. But the powers-that-be have kept detailed public employee salary information OFF the Web site. KanView only lists summary data on salaries, not the individual information required by law.[41] You can call the Kansas Department of Administration at (785) 296-3011 and demand that the letter of the law be followed by putting specific wage and salary information online.

[edit] Support for creation of the database

KanView stemmed from the Kansas Taxpayer Transparency Program of 2007, and was authorized when governor Kathleen Sebelius signed the Kansas Taxpayer Transparency Act in 2008.

Americans for Tax Reform applauded Kansas's level of transparency,[citation needed] as did the National Taxpayers Union.[42]

[edit] Fiscal Year 2011

In April 2011, state officials said that they expect the state will generate nearly $5.8 billion in general revenues, which was down $10 million from a prior projection.[43]

When House and Senate negotiators could not agree on a remedy to a budget shortfall in March 2011, Gov. Brownback announced $56.5 million in emergency cuts to guarantee the government ends the fiscal year in June without a deficit.[44]

In Jan. 2011, the House Appropriations Committee backed cuts to the state budget that are even deeper than those proposed by Gov. Brownback, including reducing state employee salaries and wages by 7.5% through June 30, 2011.[45] As written, the bill would have Kansas ending the fiscal year with an ending balance of about $45 million.[45]

In Dec. 2010, the National Conference of State Legislatures said that the state faced a midyear shortfall of $59 million, which represents 1% of the FY2011 state budget.[46]

The state received millions in federal funds, providing $87 million in funds for Medicaid and $92 million would go to public schools. Legislators, however, presumed that Kansas would receive $131 million, all of it Medicaid funds, when drafting the FY2011 budget.[47]

The Kansas state legislature passed a $13.7 billion state budget, one that includes over $300 million in tax increases.[48] The state passed the budget on the assumption that it would receive $130 million from the federal government, including Medicaid funds.[49] Should the federal money not materialize, lawmakers will have to consider consider cutting social services and aid to public schools.[49] Eighty-five percent of state general fund spending goes to schools or Medicaid.[50]

State revenues for FY2010 was 2%, or $99 million, short of expectations. The state took in $5.2 billion instead of the expected $5.3 billion.[28]

The FY2011 budget increased the state's 5.3 percent sales tax to 6.3 percent, starting July 1, 2010.[49] Tax collections in April 2010 were off by 10%, $65 million short of expectations.[51]

When determining the FY2011 budget, lawmakers left their work for a "wrap-up" session that reconvened at the end of April, after the regular session had adjourned.[50][49] It was first time that the legislature had left without a budget since current method of passing budgets was enacted more than 20 years ago.[50] Republican leaders asserted that tax increases will be necessary in the budget, but the House budget did not include a tax increase.[52] Instead, the House budget lessened funds for public education by not replacing $172 million in federal stimulus dollars.[52] Democratic Governor Mark Parkinson supported a tax increase, saying that passing a budget without increasing revenues was irresponsible.[50][49] Kansas budget may balance if a second bailout is approved which would give Kansas an additional $50 million in Medicaid extension, in addition to the $131 million it's expecting in federal funds.[53]

[edit] Budget Background

The Kansas state fiscal year begins July 1 and ends June 30. On October 1 all of the state's agencies submit their budget requests to the Governor and the Legislature. Kansas has 20 state agencies which operate on an biennial system but are authorized to file budget adjustment requests every other year. The Governor presents the proposed budget to both the House and the Senate for consideration. From February through April state officials deliberate on the proposed budget. By early June the Governor evaluates any and all changes before a final decision is approved.[54]

[edit] Budget figures

The following table provides a history of Kansas' expenditures and gross domestic product (GDP).

Fiscal Year Expenditures (billions) GDP (billions)
2000 $14.4 [55] $82.8[55]
2001 $15.6 [55] $86.4 [55]
2002 $16.7 [55] $89.6 [55]
2003 $17.5 [55] $93.6 [55]
2004 $18.4 [55] $98.4 [55]
2005 $18.9 [55] $103.3 [55]
2006 $20.3 [55] $110.6 [55]
2007 $21.7 [55] $117.3 [55]
2008 $23.3 [55] $124.4 [55]
2009 $24.9* [55] $131.9* [55]
  • NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

[edit] Accounting Principles

Main article: Kansas government accounting principles

The Kansas Legislative Division of Post Audit is the audit agency of Kansas government. The Legislative Post Audit Committee is a bipartisan committee comprising five senators and five representatives. Audit reports are published online. Barbara J. Hinton is Kansas Legislative Post Auditor.[56]

The Institute for Truth in Accounting (IFTA) rates Kansas “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Kansas’ CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[57] Kansas’ CAFRs are published online by the Division of Accounts and Reports. Kent Olson is Director of the Kansas Division of Accounts and Reports.[58]

[edit] Stimulus

Kansas has received $1.4 billion in federal funding.[59]

[edit] Public Employees

Main article: Kansas public employee salaries
Main article: Kansas public pensions

According to 2008 Census data, the state of Kansas and local governments in the state employed a total of 241,713 people.[60] Of those employees, 172,212 were full-time employees receiving a net pay of $584,592,296 per month and 69,501 were part-time employees paid $55,185,557 per month.[60] Nearly 60% of those employees, or 144,587 employees, were in education or higher education.[60]

[edit] See Also

[edit] External links

[edit] Additional reading

[edit] References

  1. ↑ The Kansas City Star "Kansas legislature sends $14.3 billion budget to governor" May 20, 2012
  2. ↑ State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  3. ↑ 3.0 3.1 Office of the Governor, Budget Report FY 2011
  4. ↑ 4.0 4.1 The Kansas City Star "Kansas legislature sends $14.3 billion budget to governor" May 20, 2012
  5. ↑ 5.0 5.1 5.2 The Wichita Eagle "With tax cuts and budget deal, Kansas Legislature finishes session" May 20, 2012
  6. ↑ 6.0 6.1 6.2 The Kansas City Star "Brownback releases a tight Kansas budget proposal"Jan. 12, 2012
  7. ↑ Budget Director's Budget Briefing Jan. 13, 2012
  8. ↑ Businessweek "Governors Seeking Jobs Offer Tax Breaks as Budget Woes Ease" Jan. 31, 2012
  9. ↑ The Wall Street Journal "The Heartland Tax Rebellion" Feb. 7, 2012
  10. ↑ The Kansas City Star "Brownback endorses using casino funds for pensions" March 26, 2012
  11. ↑ [http://www.saljournal.com/news/story/kan-KansasBudget-5thLd-Writethru-03-31-0884-clone The Salina Journal " Kan. budget agreement unravels just before vote" March 31, 2012]
  12. ↑ The Lawrence Journal World "Legislative budget impasse will cause court closings, furloughs, Chief Justice Nuss says" April 4, 2012
  13. ↑ 13.0 13.1 Businessweek "Kan. Senate approves $14.4B budget plan" May 2, 2012
  14. ↑ 14.0 14.1 The Wichita Business Journal "Kansas House approves $14B budget with $600 million in cuts" March 20, 2012
  15. ↑ Kansas City Star "Kansas House gives budget March 16, 2012
  16. ↑ Kansas Health Institute "Budget negotiators meet" March 26, 2012
  17. ↑ 17.0 17.1 The Topeka Capital-Journal "Senate advances $14B budget bill" March 2, 2012
  18. ↑ The Wichita Eagle "State senators propose adding rainy-day fund to constitution" Jan. 29, 2012
  19. ↑ "Brownback signs budget, makes veto changes" May 28, 2011
  20. ↑ Forbes "Kan. gov. OKs $13B budget but rejects arts agency" May 28, 2011
  21. ↑ Veto message from Gov. Sam Brownback
  22. ↑ Kansas Reporter "Kansas offers buyouts to 4,000 state workers" August 2, 2011
  23. ↑ Fox4KC.com "Budget Deal Keeps Kansas Courts Open" May 21, 2012
  24. ↑ The Kansas City Star "Kansas Gov. Brownback rejects federal health care grant" Aug. 10, 2011
  25. ↑ Reuters "Several U.S. states consider union limits" Feb. 25, 2011
  26. ↑ The Kansas City Star "Kansas budget chief seeks end to state income tax" July 24, 2011
  27. ↑ 27.0 27.1 27.2 The Kansas City Star "Brownback plans to maintain state spending on schools" Jan. 12, 2011
  28. ↑ 28.0 28.1 28.2 "Kansas agencies told to prepare status quo budget" July 20, 2010
  29. ↑ 29.0 29.1 29.2 Kansas Reporter "Brownback lays out budget priorities" Dec. 22, 2010
  30. ↑ The Wichita Eagle "Deeper state budget cuts will hit schools again" Jan. 3, 2010
  31. ↑ 31.0 31.1 LJWorld.com "Republicans pass Kansas budget, send it to supportive governor" May 13, 2011
  32. ↑ 32.0 32.1 Businessweek "State Legislature approves $13.8B Kansas budget" May 13, 2011
  33. ↑ The Arkansas City Traveler "Kansas Senate passes $14 billion budget with salary, school cuts" March 30, 2011
  34. ↑ Kansas Reporter "Kansas Senate panel proposes 2012 state budget" March 17, 2011
  35. ↑ Businessweek "House, Senate budget debates await Kan. lawmakers" March 28, 2011
  36. ↑ "What is KanView," Kansas Department of Administration
  37. ↑ "What is KanView," Kansas Department of Administration
  38. ↑ FY 2011 Data
  39. ↑ Kansas Division of the Budget
  40. ↑ Procurement Contract List
  41. ↑ http://blog.ntu.org/main/post.php?post_id=3492
  42. ↑ National Taxpayers Union, "Taxpayer Group Applauds Kansas for Pioneering 'Google Government' Legislation," May 3, 2007
  43. ↑ [http://www.businessweek.com/ap/financialnews/D9MKCKS00.htm Businessweek "Kan. forecasters cut revenue projections $32 million" April 15, 2011[
  44. ↑ The Topeka Capital-Journal "Unions unhappy with state spending cuts" March 12, 2011
  45. ↑ 45.0 45.1 Bloomberg "State House panel endorses cuts to Kansas budget" Jan. 25, 2011
  46. ↑ The Wall Street Journal “States Face Budget Shortfalls of $26.7 Billion“ Dec. 8, 2010
  47. ↑ "Kansas expects $179M from federal jobs legislation" Aug. 13, 2010
  48. ↑ ABC News "Kan. Senate Approves $13.6 Billion Budget" May 5, 2010
  49. ↑ 49.0 49.1 49.2 49.3 49.4 "Next Kan. budget depends on extra federal funds" June 17, 2010
  50. ↑ 50.0 50.1 50.2 50.3 "Kansas lawmakers leave Topeka without budget decision" April 4, 2010
  51. ↑ "Analysis: Surprise brings budget turmoil in Kansas" May 3, 2010
  52. ↑ 52.0 52.1 Kansas.com "Kansas legislature delays hard choices on state budget" April 1, 2010
  53. ↑ Kansas Watchdog, Medicaid Extension Likely, May Include $50 Million Bonus to Kansas, Aug. 6, 2010
  54. ↑ State of Kansas Legislative Research Department,"Legislator briefing book state finance budget overview," retrieved March 4,2009
  55. ↑ 55.00 55.01 55.02 55.03 55.04 55.05 55.06 55.07 55.08 55.09 55.10 55.11 55.12 55.13 55.14 55.15 55.16 55.17 55.18 55.19 US Government Spending,"Kansas State and Local spending," retrieved February 26,2009
  56. ↑ National Association of State Auditors, Comptrollers, and Treasurers Web site, retrieved October 22, 2009
  57. ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  58. ↑ National Association of State Auditors, Comptrollers, and Treasurers Web site, retrieved October 22, 2009
  59. ↑ Recovery, "Stimulus Spending by State"
  60. ↑ 60.0 60.1 60.2 2008 Kansas Public Employment U.S. Census Data
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