Kansas legislators leery of budget fix yet moving toward it

AP News
|
Posted: Jan 18, 2017 8:20 PM

TOPEKA, Kan. (AP) — Kansas legislators on Wednesday slammed Gov. Sam Brownback's accounting move to mask a hole in the state budget, then signaled they may approve it anyway.

The House and Senate budget committees began their review Wednesday of the Republican governor's budget plan, which doesn't include widespread spending cuts that some legislators have advocated. Kansas is one of several states, including Oklahoma and Indiana, where the problems are serious enough that legislators are reconsidering past tax cuts designed to stimulate the economy.

But Kansas can't raise taxes quickly enough to plug the projected $342 million hole in the budget for current fiscal year before it ends June 30. As an alternative to cuts in aid to public schools and further reductions in other spending, Brownback proposed a plan to shuffle funds to push immediate budget problems into the future.

"We're kicking the can down the road. Pretty soon, there won't be no more cans to kick," said Sen. John Doll, a Garden City Republican who serves on the chamber's budget committee.

But it's one thing for lawmakers to talk about cutting spending enough to close the gap and another for them to do it. Several legislators acknowledged that despite their concerns about Brownback's plan, it may be their best option.

Brownback's plan calls for liquidating a state investment portfolio to raise cash that would back $317 million in internal borrowing, with the state paying itself back over seven years. States often shuffle funds or use accounting maneuvers to get past a shortfall mid-way through a fiscal year, but Brownback's plan is a twist.

"You don't have time to raise revenues," said John Hicks, executive director of the National Association of State Budget Officers. "You've got three basic other solutions. One is to reduce spending. The other is to dip into a rainy day fund and the third is the example like this one."

Kansas has eaten through its cash reserves and struggled to balance its budget since GOP legislators slashed personal income taxes in 2012 and 2013 at Brownback's urging. Tackling the shortfall in the current budget is a first step toward closing projected gaps totaling $1.1 billion through June 2019.

Some Republicans in the GOP-controlled Legislature argue that the state needs to make "structural" budget changes — and cut spending immediately. They're wary of Brownback's internal borrowing proposal, viewing it as delaying a permanent fix.

Several legislators said lawmakers would have to reduce aid to public schools — with a lawsuit over education funding before the state Supreme Court. The House Appropriations Committee plans to review data on how each of the state's 286 local school districts would be affected, which is likely to create uncomfortable questions for lawmakers.

"Are you willing to go home and say, 'We had another option that we could have used, but we decided to cut, and these are the services that suffered the ramifications,'?" said Chairman Troy Waymaster, a Bunker Hill Republican.

During the House committee's briefing Wednesday, legislators in both parties criticized Brownback's proposal. State Treasurer Ron Estes, a Republican who has been involved in discussions about the idea, declared that he would remain neutral as he assisted lawmakers with their decisions.

Even Shawn Sullivan, the governor's budget director, called the proposal "a bad alternative" but better than other options.

"I think it's a horrible idea," said Sen. Laura Kelly, of Topeka, the ranking Democrat on her chamber's budget committee. "But we're all out of good ideas — there are no good ideas."

___

Follow John Hanna on Twitter at https://twitter.com/apjdhanna .