Kansas state budget (2011-2012)

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The state finished the fiscal year with reserves of $466 million – more than double what it had at the end of fiscal year 2011.[1]

The governor signed the $13.8 billion fiscal year 2012 budget into law on May 28, 2011.[2] The budget closed a shortfall of around $500 million by reducing overall spending 6.1 percent, with public school aid being reduced by 5.6 percent.[3]

The budget did not raise taxes and, as written, left a surplus of $50 million.[4]

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 have eased pressure on the state budget.[5]

Courts

On May 20, 2012 the Legislature approved $1.1 million in supplemental funding to keep courts open for the remaining 40 days until fiscal year 2013 began on July 1.[6]

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.[7]

Public employee unions

The House of Representatives passed a bill on February 24, 2011 that would have prohibited employee payroll deductions for union dues and political action committees.[8]

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 fiscal year 2013.[9]

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.[10] He also said the state could eliminate $750 million from its fiscal year 2012 budget while actually increasing the amount the state spent on K-12 education.[10] Gov. Brownback also planned to eliminate 2,000 state jobs, all of which were unfilled at the time of the announcement.[10]

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 fiscal year 2012, which began 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.[11]

The Budget Division guidelines for fiscal year 2012 presumed that revenues from the sales tax increase from 5.3 percent to 6.3 percent would offset the loss of up to $438 million in one-time federal stimulus funds. Although agencies were 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 five percent, if necessary.[11]

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

Brownback said he hoped to give K-12 school districts more flexibility to use their reserve funds.[13]

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 cut base state aid to schools by $232 per student, or six percent, reducing the amount from $4,012 in 2011 to $3,780 in 2012.[14][15] That was 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.[15] The plan raised the state sales tax rate from 5.3 percent to 6.3 percent in 2010 to shore up revenues. The approved budget plan called for cutting government spending by $881 million, or nearly six percent.[14]

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 reduced 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.[16] It differed significantly from the governor's proposal and focused on cuts, reducing state spending by $535 million so that the state would end the year $7.5 million in the black.

In contrast, the budget drafted by the Kansas House followed many of the governor's proposals, but shifted $35 million in funding cuts into 2011 to end with that balance instead of zero.[17]

Both versions called for spending approximately $14 billion from all revenue sources, including $6 billion from state taxes and fees.[18]

References

  1. Kansas.com, "Brownback: State finances solid enough for tax cuts," July 25, 2012
  2. Kansas Reporter, "Brownback signs budget, makes veto changes," May 28, 2011
  3. Forbes, "Kan. gov. OKs $13B budget but rejects arts agency," May 28, 2011 (dead link)
  4. Kansas Legislature, "Veto message from Gov. Sam Brownback," accessed May 6, 2014
  5. Kansas Reporter, "Kansas offers buyouts to 4,000 state workers," August 2, 2011
  6. Fox4KC.com, "Budget Deal Keeps Kansas Courts Open," May 21, 2012
  7. The Kansas City Star, "Kansas Gov. Brownback rejects federal health care grant," Aug. 10, 2011 (dead link)
  8. Reuters, "Several U.S. states consider union limits," February 25, 2011
  9. The Kansas City Star, "Kansas budget chief seeks end to state income tax," July 24, 2011 (dead link)
  10. 10.0 10.1 10.2 The Kansas City Star, "Brownback plans to maintain state spending on schools," January 12, 2011 (dead link)
  11. 11.0 11.1 KTKA.com, "Kansas agencies told to prepare status quo budget," July 20, 2010
  12. 12.0 12.1 12.2 Kansas Reporter "Brownback lays out budget priorities," December 22, 2010
  13. The Wichita Eagle, "Deeper state budget cuts will hit schools again," January 3, 2010
  14. 14.0 14.1 Businessweek, "State Legislature approves $13.8B Kansas budget," May 13, 2011
  15. 15.0 15.1 LJWorld.com, "Republicans pass Kansas budget, send it to supportive governor," May 13, 2011
  16. The Arkansas City Traveler, "Kansas Senate passes $14 billion budget with salary, school cuts," March 30, 2011
  17. Kansas Reporter "Kansas Senate panel proposes 2012 state budget," March 17, 2011
  18. Businessweek "House, Senate budget debates await Kan. lawmakers," March 28, 2011