Kansas state budget

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Kansas faced an estimated $510 million budget gap for FY 2011.^[1] Kansas will receive approximately $179 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[2]

[edit] Fiscal Year 2012

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.^[3]

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.^[3]

Economists will release the state’s first official revenue forecast for fiscal 2012 in November, 2010.^[3]

[edit] Fiscal Year 2011

The state expects to receive an additional million in federal funds, which would provide $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.^[4]

The Kansas state legislature passed a $13.7 billion state budget, one that includes over $300 million in tax increases.^[5] The state passed the budget on the assumption that it would receive $130 million from the federal government, including Medicaid funds.^[6] Should the federal money not materialize, lawmakers will have to consider consider cutting social services and aid to public schools.^[6] Eighty-five percent of state general fund spending goes to schools or Medicaid.^[7]

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.^[3]

The FY2011 budget increased the state's 5.3 percent sales tax to 6.3 percent, starting July 1, 2010.^[6] Tax collections in April 2010 were off by 10%, $65 million short of expectations.^[8]Forbes "Analysis: Surprise brings budget turmoil in Kansas" May 3, 2010</ref>

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.^[7][6] 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.^[7] Republican leaders asserted that tax increases will be necessary in the budget, but the House budget did not include a tax increase.^[9] Instead, the House budget lessened funds for public education by not replacing $172 million in federal stimulus dollars.^[9] Democratic Governor Mark Parkinson supported a tax increase, saying that passing a budget without increasing revenues was irresponsible.^[7][6] 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.^[10]

See also: The Kansas State Budget on State Budget Solutions

[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.^[11]

[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 [12]	$82.8[12]
2001	$15.6 [12]	$86.4 [12]
2002	$16.7 [12]	$89.6 [12]
2003	$17.5 [12]	$93.6 [12]
2004	$18.4 [12]	$98.4 [12]
2005	$18.9 [12]	$103.3 [12]
2006	$20.3 [12]	$110.6 [12]
2007	$21.7 [12]	$117.3 [12]
2008	$23.3 [12]	$124.4 [12]
2009	$24.9* [12]	$131.9* [12]

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

[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.^[13]

See also: Evaluation of Kansas state website

[edit] Prior Budgets

Kansas started FY 2010 July 1, 2009 with a deficit of $160 million. Gov. Mark Parkinson received a memorandum the next day on July 2, 2009 from the Director of the Budget explaining needed adjustments and proposing an allotment plan for appropriations.^[14]

August 2009 revenue figures were $7.8 million higher than projected while still being 4.9% below August of 2008, only to drop significantly in September.^[15][16] Gov. Parkinson stated, “We knew there would be good months and bad months as we work our way out of this recession. August was up a little, September was down significantly. We can handle the September shortfall through a careful management of existing funds. It is too early to panic, and too soon to make rushed decisions. We will continue to monitor revenues closely over the coming weeks and months.”^[17]

[edit] 2009-2010 budget crisis

The top 2 sources of revenue for the state are individual income taxes (49.8%) and sales & use taxes (34.9%). The FY 2011 state forecast is for 4% revenue growth to almost reach $5.7 billion for General Funds.^[18] Kansas Department of Revenue figures show September tax receipts were $67 million below expectations and $105 million below the previous year. For the first three months of the fiscal year total tax revenues are $96 million below expectations and down $169 million from the first three months of FY 2009. ^[19]

Kansas Revenue Collections Compared to FY 2009 Actual Revenue^[20]

'	FY 2010 Tax Rev. to Sept. 30	FY 2010 Budgeted Growth	Growth Needed for Remaining 9 Months
Individual Income Tax	-5.8%	2.7%	5.5%
Corporate Income Tax	-28.7%	11.6%	29.1%
Sales Tax	-2.8%	0.6%	1.8%

[edit] 2008-2009 budget crisis

See also: Kansas state budget (2008-2009)

[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.^[21]

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.^[22] Kansas’ CAFRs are published online by the Division of Accounts and Reports. Kent Olson is Director of the Kansas Division of Accounts and Reports.^[23]

[edit] Economic Stimulus Transparency

In August 2010, Congress approved a $26 billion jobs bill, giving Kansas approximately $179 million for Medicaid and education.^[2]

The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[24] It is estimated that Kansas will receive at least $1.3 billion in federal funding.^[25] 8901 jobs were created from the stimulus funds, 77 of them in the 2nd quarter of the year with $182.9 million in funding.^[26] Kansas also announced that $500 would be sent through the Kansas Department of Social and Rehabilitation Services to 10,847 to help with school costs.^[27]

The state ranked 11th on the "Summertime Blues" report by Senator Coburn and McCain which listed "wasteful" stimulus spending. Kansas spent $39.7 million upgrading office space and indoor parking for the Kansas state capital.^[28]

• The economic recovery website for Kansas is available here.

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[29][30]

The ARRP website created 4 fictional districts, creating or saving 5,934.8 or 5,940.37 jobs in Kansas including 10 in the 9th Congressional district, nine jobs in the 8th District and three in the 6th district and two in the 14th. The 00, 99th, 5th, 76th, 68th and 36th districts saw no job creation. Of course Kansas only has four Congressional districts.^[31]

[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.^[32]

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

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
KanView

[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.^[33] 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,^[34] as did the National Taxpayers Union.^[35]

[edit] Public employee salary information

The Kansas City Star maintains a searchable database of state employee information for the year 2007. Access it here.

Kanview is by law required to include "salaries and wages including, but not limited to, compensation paid to individual employees of state agencies," but the state has yet to post this information. Kansas residents can call the Kansas Department of Administration and complain about this omission at (785) 296-3011.

[edit] See Also

• Kansas taxpayer-funded lobbying

[edit] External links

[edit] Additional reading

• Washington Post,"House panel revises budget, but doesn't balance it," February 4, 2010
• Gov. Mark Parkinson,"2010 State of the State Address," January 11, 2010

[edit] References

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