TOPEKA CAPITAL JOURNAL: Gov. Brownback orders new round of cuts to rebalance state budget

By Tim Carpenter
July 1, 2016

Gov. Sam Brownback approved a series of emergency budget adjustments in response to a $33.5 million revenue shortfall in the final month of the fiscal year, officials said Friday.

The state is prohibited by law from beginning a new fiscal year with a negative balance, requiring Brownback to flex executive power to create a positive number as the 12-month budget year ended Thursday night.

The Brownback administration disclosed a decision to pull $23.6 million from the state transportation and corrections departments and a fund dedicated to early-childhood education programs.

The executive branch delayed an extra $75 million in state aid to public school districts that was due in June.

An unusually large overdue payment of $260 million will be made in July, during the new fiscal year, but school districts will record the transaction as if paid as scheduled in June.  Typically, this accounting trick allows the state to temporarily bolster the bottom line by withholding about $200 million at the end of each fiscal year.

A news release from the Kansas Department of Revenue on the June revenue shortage mentioned stop-gap budget corrections but didn’t disclose what the anticipated ending balance was at the start of the new fiscal year. Neither the revenue department secretary, the state budget director nor the governor issued statements detailing budget changes.

House Minority Leader Tom Burroughs, a Democrat from Kansas City, Kan., said policies of the Brownback administration had essentially bankrupted the state government.

“Month after month, year after year, the Kansas budget has hemorrhaged cash as a direct result of the Brownback experiment,” Burroughs said. “Gov. Brownback has blown through the state’s savings, put our monthly bills on the credit card, taken out payday loans to make ends meet and is now holding our children’s education hostage.”

The state income tax exemption given owners of 330,000 business and the individual income tax rate reductions signed by Brownback in 2012 continue to strip the government of essential funding, said Senate Minority Leader Anthony Hensley, D-Topeka.

“It’s further evidence of their mismanagement of the state’s budget,” Hensley said. “The problem won’t go away until they come to grips with reality: It’s the tax cuts that are causing these budget shortfalls.”

The latest round of adjustments became necessary because the state’s budget had been built on revenue projections that were too optimistic. Despite lowering official revenue expectations in April, the state didn’t meet monthly targets in May or June.

Previously, state budget officials recommended Brownback sweep $16 million from the Kansas Department of Transportation, $3 million from the Kansas Department of Corrections, and cash originally earmarked for the Children’s Initiatives Fund.

The new CIF withdrawal followed two sweeps during the 2016 legislative session of $11 million, triggered by weakness in state tax collections throughout the fiscal year.

“Nearly half of the $60 million originally intended for children’s programs in 2016 is instead now paying for the state’s perpetual budget crisis,” said Annie McKay, president and CEO of Kansas Action for Children.

Eileen Hawley, spokeswoman for Brownback, said the latest budget revision didn’t make use of a recommendation from Shawn Sullivan, the governor’s budget director, to transfer up to $45 million from a Medicaid fee fund to the state’s general operating budget.

Hawley said a report by the National Association of State Budget Officers indicated Kansas and two dozen other states had budget shortfalls during the last fiscal year.

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