Kansas state budget (2010-2011)

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Kansas faced an estimated $510 million budget gap for FY 2011 and the Kansas state legislature passed a $13.7 billion state budget, one that included over $300 million in tax increases.[1][2] Kansas was set to receive approximately $179 million from the federal government under HR1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[3][4]

Going into the fiscal year Kansas had a total state debt of $15,434,845,450 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[5]


2011 State spending & deficit in billions[6]
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[6]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$15.6 $0.1 $1.3 $5.6 $0.2 $1.1 $.9 $15.4

Fiscal Year 2011

In April 2011, state officials said that they expected the state would generate nearly $5.8 billion in general revenues, which was down $10 million from a prior projection.[7]

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 ended the fiscal year in June without a deficit.[8]

In Jan. 2011, the House Appropriations Committee backed cuts to the state budget that were even deeper than those proposed by Gov. Brownback. The cuts included reducing state employee salaries and wages by 7.5% through June 30, 2011.[9] The bill called for Kansas ending the fiscal year with an ending balance of about $45 million.[9]

In Dec. 2010, the National Conference of State Legislatures said that the state faced a midyear shortfall of $59 million, which represented 1% of the FY2011 state budget.[10]

The state received millions in federal funds, including $87 million in funds for Medicaid and $92 million which would go to public schools. Legislators, however, presumed that Kansas would receive $131 million, all of it Medicaid funds, when drafting the FY2011 budget.[11]

The Kansas state legislature passed a $13.7 billion state budget, one that included over $300 million in tax increases.[12] The state passed the budget on the assumption that it would receive $130 million from the federal government, including Medicaid funds.[13] Eighty-five percent of state general fund spending went to either schools or Medicaid.[14]

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.[15]

The FY2011 budget increased the state's 5.3 percent sales tax to 6.3 percent, starting July 1, 2010.[13] Tax collections in April 2010 were off by 10%, $65 million short of expectations.[16]

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.[14][13] It was first time that the legislature had left without a budget since the current method of passing budgets was enacted more than 20 years ago.[14] Republican leaders asserted that tax increases would be necessary in the budget, but the House budget did not include a tax increase.[17] Instead, the House budget lessened funds for public education by not replacing $172 million in federal stimulus dollars.[17] Democratic Governor Mark Parkinson supported a tax increase, saying that passing a budget without increasing revenues was irresponsible.[14][13]

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 had 20 state agencies which operate on an biennial system but were 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 was approved.[18]

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[19] $82.8[19]
2001 $15.6[19] $86.4[19]
2002 $16.7[19] $89.6[19]
2003 $17.5[19] $93.6[19]
2004 $18.4[19] $98.4[19]
2005 $18.9[19] $103.3[19]
2006 $20.3[19] $110.6[19]
2007 $21.7[19] $117.3[19]
2008 $23.3[19] $124.4[19]
2009 $24.9*[19] $131.9*[19]
  • NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

Budget transparency

KanView was 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.[20]

See also: Evaluation of Kansas state website

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.[21]

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.[22][23] 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 was too early to panic, and too soon to make rushed decisions. We would continue to monitor revenues closely over the coming weeks and months.”[24]

2009-2010 budget crisis

The top 2 sources of revenue for the state were individual income taxes (49.8%) and sales & use taxes (34.9%). The FY 2011 state forecast was for 4% revenue growth to almost reach $5.7 billion for General Funds.[25] 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 were $96 million below expectations and down $169 million from the first three months of FY 2009.[26]


' 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%

2008-2009 budget crisis

See also: Kansas state budget (2008-2009)

Accounting principles

See also:Kansas government accounting principles

The Kansas Legislative Division of Post Audit is the audit agency of Kansas government. The Legislative Post Audit Committee was a bipartisan committee comprising five senators and five representatives. Audit reports were published online. Barbara J. Hinton was Kansas Legislative Post Auditor.[27][28]

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 did 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 did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[29] Kansas’ CAFRs were published online by the Division of Accounts and Reports. Kent Olson was Director of the Kansas Division of Accounts and Reports.[30][31]


Economic stimulus transparency

In August 2010, Congress approved a $26 billion jobs bill, giving Kansas approximately $179 million for Medicaid and education.[3]

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 was estimated that 69%, or over $541 billion, would be administered by state governments.[32] It was estimated that Kansas would receive at least $1.3 billion in federal funding.[33] 8901 jobs were created from the stimulus funds, 77 of them in the 2nd quarter of the year with $182.9 million in funding.[34] 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.[35]

  • Kansas had an economic recovery website.[36]

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 were updated soon after the close of Kansas's fiscal year, which runs from July 1 to June 30.[37][38]

The following table was 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 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, as did the National Taxpayers Union.[39]

Public employee salary information

The Kansas City Star maintained a searchable database of state employee information for the year 2007.[40]

Kanview was by law required to include "salaries and wages including, but not limited to, compensation paid to individual employees of state agencies," but the state had yet to post this information.[41]

See also

External links

Additional reading

References

  1. ABC News "Kan. Senate Approves $13.6 Billion Budget" May 5, 2010
  2. The Wichita Eagle "Shortfall for '11 state budget tops $500 million" April 17, 2010
  3. 3.0 3.1 Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  4. H.R. 1586
  5. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  6. 6.0 6.1 Office of the Governor, Budget Report FY 2011
  7. [http://www.businessweek.com/ap/financialnews/D9MKCKS00.htm Businessweek "Kan. forecasters cut revenue projections $32 million" April 15, 2011[
  8. The Topeka Capital-Journal "Unions unhappy with state spending cuts" March 12, 2011
  9. 9.0 9.1 Bloomberg "State House panel endorses cuts to Kansas budget" Jan. 25, 2011
  10. The Wall Street Journal “States Face Budget Shortfalls of $26.7 Billion“ Dec. 8, 2010
  11. "Kansas expects $179M from federal jobs legislation" Aug. 13, 2010
  12. ABC News "Kan. Senate Approves $13.6 Billion Budget" May 5, 2010
  13. 13.0 13.1 13.2 13.3 "Next Kan. budget depends on extra federal funds" June 17, 2010
  14. 14.0 14.1 14.2 14.3 "Kansas lawmakers leave Topeka without budget decision" April 4, 2010
  15. Cite error: Invalid <ref> tag; no text was provided for refs named prepare
  16. "Analysis: Surprise brings budget turmoil in Kansas" May 3, 2010
  17. 17.0 17.1 Kansas.com "Kansas legislature delays hard choices on state budget" April 1, 2010
  18. State of Kansas Legislative Research Department,"Legislator briefing book state finance budget overview," retrieved March 4,2009
  19. 19.00 19.01 19.02 19.03 19.04 19.05 19.06 19.07 19.08 19.09 19.10 19.11 19.12 19.13 19.14 19.15 19.16 19.17 19.18 19.19 US Government Spending,"Kansas State and Local spending," retrieved February 26,2009
  20. "What was KanView," Kansas Department of Administration
  21. Kansas Department of Administration, “FY 2010 State General Fund Allotments,” July 2, 2009
  22. Gov. Parkinson Press Release, “Governor Parkinson’s statement on August revenue,” August 31, 2009
  23. Kansas Watchdog.org, “Kansas 2010 Budget Crisis,” October 2, 2009
  24. Gov. Parkinson Press Release, “Governor Parkinson’s statement on September revenue,” September 30, 2009
  25. Gov. Mark Parkinson, “Comparison Report FY 2010,” August 7, 2009
  26. Kansas Watchdog.org, “Kansas 2010 Budget Crisis,” October 2, 2009
  27. National Association of State Auditors, Comptrollers, and Treasurers Web site, retrieved October 22, 2009
  28. Audit reports
  29. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  30. National Association of State Auditors, Comptrollers, and Treasurers Web site, retrieved October 22, 2009
  31. CAFRs
  32. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  33. Wall Street Journal, "Stimulus Spending by State"
  34. Kansas Watchdog, Recovery.gov: 77 more jobs, $183 million more received in Kansas in last quarter, Aug. 7, 2010
  35. Kansas Watchdog, Kansas won’t reveal which families got $500 in stimulus money, Aug. 10, 2010
  36. Kansas Economic Recovery
  37. "What was KanView," Kansas Department of Administration
  38. KanView
  39. National Taxpayers Union, "Taxpayer Group Applauds Kansas for Pioneering 'Google Government' Legislation," May 3, 2007
  40. Kansas City Star searchable database of state employee information
  41. Kanview