By Jonathan Shorman
July 7, 2016

Gov. Sam Brownback said Thursday he is open to bigger cuts in government spending, but he is looking to lawmakers to lead the discussion.

Brownback ordered fund transfers last week to balance the budget and finish the fiscal year — including sweeping dollars from the state highway fund and a fund for children’s programs. Although the administration didn’t publicly disclose the specific amount at the time, documents show officials took more than $680,000 that had been marked for the Kansas Reading Success program.

The state frequently has failed to collect enough revenue to fully fund the budget during the past two years, and Brownback has had to repeatedly take a scalpel — sometimes a hatchet — to spending.

Some Republican lawmakers, most notably Senate President Susan Wagle, have indicated further spending reductions are needed.

“Clearly, we’re here because we haven’t cut expenses enough,” Wagle said in June at a meeting where state leaders authorized a record $900 million debt certificate to allow Kansas to meet its financial obligations during periods of low cash flow in the coming year.

Brownback said it is the Legislature’s “venue” to set spending levels, but that he is open to reductions. While the Legislature appropriates funds, the governor must submit a budget proposal to lawmakers.

“If the Senate president and others want to do this — it should be, it needs to be a part of the discussion about how else we would do it but I hope that’s something the Legislature really picks up,” Brownback told reporters.

Lawmakers have saddled Brownback with the task of making painful cuts. The Legislature passed an unbalanced budget this spring that required him to cut and sweep nearly $100 million to make it balance.

The governor appeared less interested in re-opening discussions over tax policy but didn’t rule it out. In 2015, the Legislature passed and he signed into law increases to the state sales tax and tobacco taxes.

“We’ll see what the Legislature wants to do,” Brownback said. “You just had a difficult economic atmosphere in 2015. You had a major tax discussion, and it didn’t bring the dollars in because of the economy.”

After those changes, tobacco tax collections rose by 56 percent, or nearly $50 million, during the previous fiscal year. Kansas also took in $141 million more in sales tax than the previous year, an increase of 6.6 percent.

Other revenue sources, such as oil and gas, were down. The state collected 15 percent less in corporate income taxes compared with the previous fiscal year — a drop of $62 million. Individual income tax was down 1.3 percent, or $28 million.

Democrats and moderate Republicans are expected to pick up at least some legislative seats this fall, likely increasing pressure on legislative leaders to debate tax policy.

“I think everything will be on the table next session. I think we will continue to strive to find efficiencies in government spending,” said Rep. Blaine Finch, R-Ottawa, adding that lawmakers want taxpayers to receive the best bang for their buck.

“And I think there are an equal number of folks out there that want to talk about revenue and what we need to do on that to make sure we can properly fund basic government services,” he said.

After June tax revenues fell more than $33 million short of estimates, the governor ordered about $23 million in budget adjustments to close out the fiscal year. While the funds affected were announced last week, the specific amounts weren’t.

At the time, House Minority Leader Tom Burroughs, D-Kansas City, said the budget “has hemorrhaged cash as a direct result of the Brownback experiment.”

A June 30 letter from budget director Shawn Sullivan to DeAnn Hill, the state’s chief financial officer, details the changes. According to the letter, Brownback allotted $2.9 million from the Department of Corrections and transferred $20 million from the state highway fund.

Sullivan had previously cited $16 million as the amount that could be swept from the highway fund as part of budget adjustments.

The administration also transferred $680,500 from the Kansas Reading Success program, which uses money from the Children’s Initiative Fund that draws upon tobacco settlement cash.

“Just two weeks ago, the annual KIDS COUNT data book revealed that Kansas’ fourth grade reading proficiency ranking has fallen from 13th to 30th nationwide,” said Annie McKay, president and CEO of Kansas Action for Children. “If improving the reading scores of Kansas kids remains a top priority, now is not the time to cut investments in programs intended to help Kansas kids get ahead.”

The transfer from Kansas Reading Success doesn’t appear to affect money already set to be spent. The company Istation holds the contract for the program, which offers students reading instruction and assessments.

Dale Dennis, deputy commissioner of the Kansas State Department of Education, said the full $2.1 million in the fund hadn’t been spent because Istation’s contract didn’t span a full year. It began in October and ran through June.

Dennis said he anticipates the full amount will be spent during the current fiscal year.

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