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Kansas state budget (2008-2009)

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State Information


Kansas, like many other states, was facing a $186 million gap for fiscal year 2009 and, according to early estimates, an approximately $1 billion deficit for fiscal year 2010.[1][2] However, subsequent estimates placed fiscal year 2010's shortfall at $654 million.[3]

Gov. Kathleen Sebelius recommended $600 million in budget cuts for fiscal year 2010, which included eliminating programs, closing facilities, freezing new hires, and reducing spending. However, in light of the federal economic stimulus package, Sebelius amended her recommended budget to "prevent harm" to the state. "Budget cuts deeper than what I have already recommended are not necessary, and would in fact do great harm to our state’s economy and employment levels," said Sebelius.[4][5] However, state officials said their target for reductions in fiscal year 2010 was greater than the governor's recommendations - $625 million. According to the governor's recommended budget, the proposed cuts could reduce the projected fiscal year 2010 shortfall $103 million; however, that estimate depended on $57 million in revenue from state-owned casinos that hadn't yet been built.[3]

However, Sebelius' 2009 nomination as U.S. Secretary of Health and Human Services under President Barack Obama resulted in some state legislators saying that the nomination was a "distraction" from the state's budget crisis. "The state budget remains substantially out of balance, and she will leave behind no consensus on how to balance it," said Senate Majority Leader Derek Schmidt. However, House Minority Leader Paul Davis said that he expected nothing but a smooth transition when Sebelius left office. Lt. Gov. Mark Parkinson took over Sebelius' role as governor.[6][7]

Impact of budget woes

See also: State budget crisis, 2009-2010
  • The Department of Corrections faced a cut in state funding from $276 million to $257. However, officials said they feared that the cut would impede on Kansas' progress on prison reforms. "We are systematically undoing those things that have led to lower prison populations, lower recidivism rates, lower absconder rates and lower reconviction rates," said Corrections Secretary Roger Werholtz. "I think it's unavoidable with the kind of budget rescissions the state is having to make." For 2010, the governor recommended $7.6 million for parole and post-release programs, a 5.7 percent cut from what the agency requested.[8]
  • In February 2009 a Senate committee recommended that the state cut funding to higher education by 13 percent, or $120 million. Educators warned state officials that such "drastic cuts" would lead to layoffs, crowded classes and cuts in courses.[9]
  • The Kansas City area’s December 2008 unemployment rate was 6.5 percent, up from 6.2 percent in November and 5.1 percent in December 2007. Non-farm employment in the Kansas City area was 1.01 million in December, down 11,800 jobs, or 1.2 percent, from a year earlier, compared with a national decrease of 2 percent. The nation’s non-farm unemployment rate hit 8.5 percent in January 2009.[10]
  • In December 2008 the state of Kansas saw unemployment rates increase by a tenth of a percent to 4.9, compared to November's 4.8 percent. Department of Labor figures also showed 37,482 Kansans filed initial claims for unemployment benefits in December - twice the number filed in December 2007.[1]

Budget background

See also: Kansas state budget

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 that 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]

The fiscal year 2009 budget totaled $13.5 billion, a $334.2 million or a 2.5 percent increase from fiscal year 2008. The general fund for fiscal year 2009 totaled $6.4 billion, a $266.8 million or 4.3 percent increase from fiscal year 2008.[11]

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 had not been finalized at the time this data was compiled.

Ideas about why the crisis occurred

  • According to the state Department of Revenue, preliminary reports show that tax collections were about $12 million short of expectations. The state's official economic forecast predicted Kansas could collect $251 million in general tax revenues. Instead, it collected about $239 million.[13]
  • The Shawnee County Commission was spurring efforts to correct prior oversights in the distribution of state fuel tax revenues to local governments. Errors in the annual fuel tax revenue distributions date to 1999 because of a faulty computer program, said state officials, and were not discovered until 2008. Shawnee County, for example, was shorted approximately $3.3 million.[14]
  • After fiscal year 2006, state income leveled off around $5.75 billion, while state expenditures continued to rise rapidly, with an estimated $6.5 billion in spending for fiscal years 2009 and 2010, while tax revenues were estimated to remain close to $5.75 billion, according to the Kansas Division of the Budget.[15]

Proposed actions

Governor Kathleen Sebelius

In light of the state's budget crisis, the governor recommended $600 million in budget cuts and did not recommended an increase in taxes; however, in late February 2009 Sebelius recommended dedicating $909 million of the federal stimulus package to providing a cushion for the current budget, preventing a deficit in fiscal year 2010. Sebelius also proposed to use another $384 million in stimulus funds for public schools, split between fiscal year 2010 and fiscal year 2011.[16] The governor suggested in February 2009 that the state move $225 million into the state's main bank account from other state government accounts; however, in late February Republicans in both the House and the Senate prevented the move. Legislators said that first the governor must sign a bill balancing the budget for the fiscal year ending June 30, 2009.[17] Additionally, the governor's proposal kept kindergarten through high school funding at 2009 levels because of the influx of money that the state would receive from the federal economic stimulus package. Her plan called for $367 million in recovery funds from the stimulus bill to stabilize K-12 funding and to restore higher education funding to the prior year's level. In February 2009 Sebelius signed off on a $300 million deficit reduction package to address shortfalls in the state budget.[18]

Republicans

In January 2009 Senate committee chairman Jay Emler proposed a 3.4 percent across-the-board cut in the state budget. According to Emler, his proposal would adjust the state budget by $302 million by June 30. Republicans said that they expected the deficit to grow more than the projected amount. That, said Emler, was the reason behind his aggressive plan. The governor proposed targeted spending cuts and accounting changes to eliminate a projected $186 million budget deficit, less aggressive than Emler's proposal.[19] The Senate's Republican leaders fashioned a proposal to make $266 million in cuts, with a total of $302 million in adjustments to the budget. The reductions included a $99 million cut in aid to public schools - compared with $7 million in the bipartisan Senate bill. Rep. Lee Tafanelli said, ""All we're doing is basically kicking the can down the road just a little bit farther."[20]

In February the governor recommended moving $225 million into the state's main budget account from other individual state accounts, Republicans in the House and the Senate prevented the move until the governor signed a bill balancing the fiscal year 2009 budget.[17]

Democrats

Democrats urged Gov. Sebelius to veto recommended school budget cuts, $28 million in funding for public schools and $4.5 million for special education, by legislators. They said they worried the reductions could bankrupt small, rural districts that didn't have large reserves.[21] Senate Minority Leader Anthony Hensley and House Minority Leader Paul Davis said Friday they believed the legislation cut education far too deep.[22] In an effort to increase the state's minimum wage, Hensley proposed a bill that would require the Kansas Department of Labor to adjust the caps on workers’ comp benefits to an amount equal to the Midwest cost of living adjustment. The bill failed to pass the Senate, but did pass the House. Even so, Hensley said that he proposed a change to his bill that would phase in the increases.[23] The bill raised Kansas' wage from $2.65 to $7.25 on January 1 so it would match the federal minimum.[24]

Economic stimulus package

Kansas was expected to receive approximately $1.7 billion from the $787 billion economic stimulus package.[25] According to White House officials, the stimulus bill was estimated to create or save 33,000 jobs.[26]

According to preliminary reports Kansas was expected to receive:[27][26][28]

  • $350 million for highways construction projects
  • 27 million for transit projects
  • $440 million for health care
  • $55 million to help make moderate income homes more energy efficient
  • $106.9 million for special education
  • $93 million for schools with large numbers of low-income students
  • $367.4 million for a stabilization fund that can be used for public schools and higher education

Budget transparency

KanView is the name of the state'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.[29]

Legislation

Economic stimulus transparency

  • The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[30]
  • It was estimated that Kansas would receive at least $1.3 billion in federal funding.[31]

Government tools

KanView provides a searchable database of state financial information, organized by expenditures and revenues for five categories: Agency, Fund, Program, Object and Vendor. Annual expenditures and revenues are updated soon after the close of the state'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 Y
600px-Yes check.png
Y
600px-Yes check.png
Y
600px-Yes check.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png

Support for creation of the database

KanView stemmed from the Kansas Taxpayer Transparency Act 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, as did the National Taxpayers Union.[33][34]

Public employee salary information

See also: Kansas state government salary

See also

External links

References

  1. 1.0 1.1 The Topeka Capital-Journal, "Employment and retail sales numbers indicate state's revenue problems won't improve soon," January 29,2009
  2. KMBC, "Kansas budget deficit," January 26,2009
  3. 3.0 3.1 Lawrence Journal-World, "Sebelius crunches new budget numbers," March 2,2009
  4. State of Kansas, "Governor Kathleen Sebelius amendment to FY2010 recommended budget," February 27,2009
  5. WIBW, "Kansas Governor makes new 2010 budget proposals," February 27,2009
  6. Associated Press, "State budget unfinished:Cabinet position comes amid fiscal questions," March 3,2009
  7. The Wichita Eagle, "How would Kathleen Sebelius appointment affect Kansas budget situation?," March 3,2009
  8. Associated Press, "Kansas prison official warns that cuts undo progress," March 3,2009
  9. KSAL, "Senate budget writers recommend huge cuts to higher ed," February 27,2009
  10. Kansas City Business Journal, "January unemployment rate climbs," February 6, 2009
  11. 11.0 11.1 State of Kansas Legislative Research Department, "Legislator briefing book state finance budget overview," accessed March 4,2009
  12. 12.00 12.01 12.02 12.03 12.04 12.05 12.06 12.07 12.08 12.09 12.10 12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 US Government Spending, "Kansas State and Local spending," accessed February 26,2009
  13. Associated Press, "Kansas tax revenues off again in February," March 3,2009
  14. The Topeka Capital-Journal, "Shawnee County Commission right to pursue any additional money misdirected by the state," March 4,2009
  15. CNSNews, "Now Facing Financial Crisis, Kansas Boosted State Spending Nearly 15% in Past Two Years," February 20,2009
  16. Associated Press, "Latest Kansas budget plan relies on stimulus," March 2,2009
  17. 17.0 17.1 Associated Press, "GOP message lost in drama," February 23,2009
  18. Fort Scott Tribune, "Local school officials happy with Sebelius' proposal," March 4,2009
  19. Associated Press,'GOP chairman proposes plan for Kansas deficit," January 26,2009
  20. Associated Press, "Kansas deficit plan has bipartisan House support," January 29,2009
  21. Kansas City Star, "Sebelius signs Kansas budget bill, ending impasse," February 17,2009
  22. Hutchinson News, "Democrats urge veto on school cuts," February 13,2009
  23. Lawrence Journal-World, "Increase in workers’ compensation appears unlikely this session," March 4,2009
  24. Associated Press, "Kan. Dem leader: Was wage bill leverage on coal?," February 20,2009
  25. Associated Press, "Kansas could get $1.7B from stimulus bill," February 13,2009
  26. 26.0 26.1 KSN, "Kansas prepares for stimulus money," February 18,2009
  27. Lawrence Journal-World, "Kansas in line for $350 million for highways," February 13,2009
  28. Lawrence Journal-World, "Kansas schools could receive $575 million in federal stimulus funds," February 25,2009
  29. "What was KanView," Kansas Department of Administration
  30. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  31. Wall Street Journal, "Stimulus Spending by State"
  32. "What was KanView," Kansas Department of Administration
  33. Americans for Tax Reform, "Taxpayer Transparency in Kansas – Track Your Tax Dollars at a Mouse Click," April 25, 2007
  34. National Taxpayers Union, "Taxpayer Group Applauds Kansas for Pioneering 'Google Government' Legislation," May 3, 2007