Whither the Kansas Budget?

If there's one topic in the Kansas Legislature sure to make the average voter's eyes roll back into their head, it is the ongoing Kansas budget negotiations. But as we all know, the Kansas budget—and related tax policy—is also the single most important topic in the Kansas Legislature today. The revenue disaster of the last five years has caused or made worse the crisis in public education funding, infrastructure improvements, and medical care in Kansas.

A refresher on the problem

Here's a quick rundown of what needs fixing. Kansas has rarely met revenue expectations since Brownback's tax policies were implemented. This past Fall, the Administration decided to dramatically lower those expectations, and since then have routinely met that lowered bar. It's like deciding that an F is now a passing grade, and being excited that nobody is failing the class.

These perennial revenue misses have left Kansas in a deep hole, a hole that has to get filled every year by law (the state must balance its budget every year). So every year, Kansas has had to either cut spending, or steal money from other parts of the government. Or both, as is usually the case. In previous years, they have cut K-12 education, higher education, roads and bridges, pensions, and rainy day funds. And this year they need to cut, too, despite the rosy new bar-lowered revenue gains.

And then, on top of all that, the Kansas Supreme Court just ruled that Kansas has, in fact, been underfunding public education for years, with the result that a quarter of Kansas schoolchildren cannot read and write at the level they should. They have mandated that the state fix this by June 30.

As a result, the Kansas Legislature must do several things still this session:

  • Find money to close this year's budget gap
  • Develop a legal, fair, and adequate school funding plan
  • Reform revenue (tax) policy to prevent more cuts next year and in future years

How is balancing this year's budget going?

Earlier in the year, the House passed HB 2052 and HB 2161, bills to close this year's budget gap. It did so by borrowing funds, but did not include additional cuts to existing programs, and did not include selling off the Big Tobacco settlement that provides millions every year for early childhood programs. The bill sat while Senate leadership tried to pass their own set of bills that would have repealed some of the Governor's tax policies, and also closed the budget gap. But part of their strategy was to further cut public education, to the tune of $125 million. This last was met with resistance, and rather than proceed and fail, Senate leadership chose to pull the bills and pout.

Finally, last week, they began to work the House bill, and after another attempt by Senate leadership to cut spending failed (and failed, and failed), passed their version of HB 2052. There are differences with the House version, and a committee of both chambers is expected to meet this week to work out the differences.

So, despite repeated attempts to continue cutting K-12 education, it seems a plan is moving ahead to balance this year's budget without doing so.

What about school funding?

Public school funding is the big wrench in the process. Brownback and his allies were hopeful that they could continue to find savings by underfunding schools, but the Supreme Court's decision has trumped that. While several plans have been introduced, one the excellent HB 2270, there has been little movement. Reportedly this week will bring bills and debate in the House, at least in committee, while the Senate sits and watches. There is still some question about how much money is needed to satisfy the Court's ruling, with estimates as high as $800 million. That number will be part of the debate moving forward.

So, how about fixing our revenue problem permanently?

Well, in the election in 2016 the voters sent new and veteran legislators a resounding message: fix the revenue problem, turn back Brownback's tax policies, and make Kansas better than "great" again. The message was direct, but the process has been anything but.

In December, before the Legislature began this session, MainStream was proud to support the collaborative "Rise Up" plan to fix the budget. This plan included rolling back Brownback's policies, protecting our infrastructure funds from future highway robbery, and restoring three tax brackets. It also lowered food sales tax, but raised the tax on gas, among other provisions. Although this bill was introduced as HB 2237, it did not advance out of committee.

In early February, after passing the recission bill above, the House worked to create legislation that would fix the revenue problems for good. HB 2178 repealed the Brownback policies, restored three tax brackets, and set the state on a path to solvency. The bill passed both chambers by wide margins, and was sent to the Governor's desk in late February. When Governor Brownback predictably vetoed it, the Kansas House overturned the veto, but the Kansas Senate fell three votes short.

So much for new revenue policy.

Since then, it has been unclear what strategy legislators are pursuing. Some extremists calling themselves the "Truth Caucus" are threatening a "flat tax" proposal, reducing Kansas tax brackets to one, which hits low and middle income Kansans with a heavier burden than the highest earners. Waiting in the wings is SB 215, basically the same bill as HB 2178 that almost overcame the veto, but with revenue changes starting in 2018, instead of 2017, ensuring more cuts to come in next year's session.

So, where are we now?

It looks like a plan is in place to get out of 2017 with a balanced budget, and no new cuts. But a school finance plan is just getting started, and will affect future budget years to a great degree. A solution to the state's ongoing revenue problems, forced on us by the Governor's tax policies, is still up in the air, and will need to take increased school funding into account.

One step forward, two steps yet to go.

Remember to do more than vote. Get informed. Get involved. Make a difference.

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